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Malaysia Derivatives Exchange Berhad (MDEX) Considering Cross Trading to Enhances Liquidity And Diversity

Date 12/06/2002

Malaysia Derivatives Exchange Berhad (MDEX) is considering the cross trading of derivative products with other exchanges in the region as a means to provide greater liquidity and diversity of derivative products.

MDEX Chief Operating Officer, Dr. Zaha Rina Zahari said cross trading is an effective option for regional derivative exchanges to consider in expanding investor interest in regional derivative products.

"It is certainly in the interest of MDEX to continue to consider strategic alliances, including cross trading of products, with regional exchanges to expand business growth. Cross trading between suitable exchanges would result in mutual benefits for the exchanges concerned."

"MDEX need to deliberate carefully on the effectiveness of cross trading - in terms of the market we are entering into and also the products which we will include on our market" Dr Zaha Rina explained.

Commenting on a recent media report on the possibility of cross trading of futures products between Indonesia and Malaysia, Dr Zaha Rina said initial discussions with the Jakarta Futures Exchange (JFX) have started.

"It is too early to draw any conclusions. The initial meeting will pave the way for further discussions on the viability for MDEX to trade JFX's Olien Contracts and in return, to have MDEX's Crude Palm Oil futures to be traded on JFX. "We will need to examine how cross trading with JFX will enhance value for both our markets" Dr Zaha Rina said.

Products currently traded on MDEX are Kuala Lumpur Stock Exchange Composite Index Futures (FKLI), Kuala Lumpur Stock Exchange Composite Index Options (OKLI), Crude Palm Oil Futures (FCPO) and Three-month KLIBOR Futures (FKB3) and the Five-Year Malaysian Government Securities (FMG5).