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Overseas banks join gold bourse
Last Updated(Beijing Time):2008-02-20 10:57
Shanghai Gold Exchange has approved Standard Chartered and HSBC banks as members to activate trading, bourse chairman said yesterday.

The two are the bourse's first two overseas members. They are expected to start trading gold in March or April to act as market makers, Shen Xiangrong, chairman of Shanghai Gold Exchange, said yesterday.

"The entry of the two players will help boost trading volume of the gold exchange," said Albert Cheng, managing director of Far East World Gold Council. "It can also help the bourse become more international."

Individual gold trading and gold derivatives trading will be the two key areas that the bourse will focus on in its development, Shen said.

Shen expected the number of individual investors to triple this year as more commercial banks launch individual gold trading services.

About 94,000 individual investors traded gold through the bourse last year and the figure is expected to grow to 200,000 or even 300,000, he said.

The bourse traded 1,828.13 tons of gold last year, up 46 percent from the previous year. The trading value gained 62.51 percent to 316.49 billion yuan (US$44.2 billion).

With more individual coming into the market, Shen expected the trading volume will keep growing this year, without giving a detailed figure.

China surpassed the United States as the world's second-biggest retail gold market after India last year in volume.

Total consumer demand on the Chinese mainland, Hong Kong and Taiwan reached 363.3 tons, 23.5 percent up than a year previously, the World Gold Council said.

Philip Olden, managing director and chief marketing officer of the council, said the country stood out with a growth in demand of 20 percent in the fourth quarter, while other major markets saw appetite drop. He is "very optimistic" about China's gold demand this year despite record high prices.

Source:Shanghai Daily 
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