Bursa Malaysia Derivatives (“BMD”) has successfully launched the US Dollar denominated Tin Futures Contract (“FTIN”) today, the second metal futures contract traded on Bursa Malaysia Berhad.
Bursa Malaysia Berhad’s Chief Executive Officer Datuk Seri Tajuddin Atan said, “The newly launched FTIN will serve the global tin industry as a price risk management tool by complementing the Kuala Lumpur Tin Market’s (“KLTM”) physical tin market. The introduction of FTIN contract will diversify our metals offering to include base metals following our foray into the precious metals space with the introduction of the gold futures contract in 2013. It also underscores Bursa Malaysia’s commitment to continuously introduce new products and asset classes, thereby bringing more trading and investment opportunities to more Malaysians”.
Currently, KLTM’s tin prices is a pricing benchmark for Asian Tin Market. Their membership also includes companies from both Malaysian and International. With the global access network of BMD trading platform, BMD hopes to attract both domestic and international players especially from Asia region. Asia accounts for about 80 per cent of global production and about 70 per cent of global consumption.
The contract size of FTIN is one metric tonne (MT) and it is a cash settled futures contract referenced against KLTM. In addition, the contract will be available for trading up to 12 months and this will allow hedgers to manage their price risk up to one year. The trading hours for FTIN will be from 9:00 a.m. to 12:00 pm (Malaysia Time Zone) for the first trading session and 1:30pm to 3:00pm (Malaysia Time Zone) for the second trading session. FTIN trading session is designed to overlap with other regional exchanges to create opportunities for arbitrageurs.
BMD offers a fee holiday of six months from the date of the FTIN’s launch, to increase liquidity and create interest on FTIN among local and foreign brokers.
