Bursa enhances FCPO to face stiffer competition from Singapore’s Apex

KUALA LUMPUR: Bursa Malaysia Bhd has enhanced the global reference crude palm oil futures (FCPO) for vegetable oil traders’ convenience, in view of Singapore launching its third derivatives market.

“We are also keeping a close watch on Singapore’s soon-tobe-launched derivatives exchange, Apex,” said Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan.

“We know Apex plans to offer palm olein contracts, starting May. This poses stiffer competition as well as more trading interests in palm oil,” he said after the opening of the 29th Palm and Lauric Oils Price Outlook Conference and Exhibition, here, yesterday.

He said Bursa Malaysia had raised position limits for the FCPO to allow traders increase their exposures without the need to seek additional exemptions.

It also revised daily trading hours, giving traders an additional 30 minutes.

“So, the palm futures market now operates from 10.30am to noon and takes a lunch break. It resumes trading from 2.30pm to 6pm,” said Tajuddin.

He said the Bursa Malaysia Derivatives Market had also extended FCPO to three years from two years.

These additional tradeable contract months would give more flexibility to traders to hedge their palm oil exposure.

Tajuddin said the governmentdriven Malaysian Sustainable Palm Oil certification was incorporated in trading as Bursa Malaysia required sellers to provide traceability documents to facilitate the tracking of the origins of crude palm oil up to the palm oil mill.

Apex is Singapore’s third derivatives exchange after the Singapore Exchange and Intercontinental Exchange.

It aims to start trading in May with its first contract, a US dollar-denominated physically-delivered palm olein futures.

In the mid term, Apex intends to offer futures and options contracts covering commodity and financial derivatives products, including agriculture, energy, petrochemical, metal, interest rates and stock indices.

Apex founder and chief executive officer Eugene Zhu Yuchen is one of the pioneering founders of China’s futures market and previously helmed the Dalian Commodity Exchange and the China Financial Futures Exchange.

Zhu aspires for Apex to be an exchange that will be the Asian centre for price benchmarks to be referenced by global market participants.