4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE TFEX Gold Futures Role in providing an access to a hedging tool for the investors and gold trade Rinjai Chakornpipat Thailand Futures Exchange 4-6 JUNE 2017 Grand Copthorne, Singapore
Outline 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • Gold Trading Landscape in Thailand • TFEX Gold Futures • Upcoming development 4-6 JUNE 2017 2
Outline 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • Gold Trading Landscape in Thailand • TFEX Gold Futures • Upcoming development 4-6 JUNE 2017 3
Gold as a wealth indicator for Thai 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • Perceived as low risk asset, suitable for saving • High liquidity asset that can exchanged for cash at any 7,500 gold shops around the country • Trade in local unit and purity Weight : 1 Baht Gold = 0.49 toz. or 15.244 g. Purity: 96.5% • Price as indicated by Gold Trader Association which usually change twice daily 4-6 JUNE 2017 4
Thailand is among the top 10 gold importers 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Import % of Value in World Importers 2016 Import (Billion Value USD) 1. 82.9 30% Switzerland 2. 58.0 21% UK 3. 29.5 11% Hong Kong 4. 22.9 8% India 16.5 6% 5. USA 6. 11.6 4% UAE 6.5 2% 7. Turkey 8. 5.9 2% Thailand 9. 5.6 2% Canada 10. 5.5 2% Germany Source: http://www.trademap.org 4-6 JUNE 2017 5
Outline 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • Gold Trading Landscape in Thailand • TFEX Gold Futures • Upcoming development 4-6 JUNE 2017 6
Top 10 Gold Futures Trading in Asia (2016) 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Rank Exchange Volume 1 Shanghai Futures Exchange 34,759,523 2 Tokyo Commodity Exchange 13,596,195 3 Multi Commodity Exchange of India 13,095,302 4 Borsa Istanbul 4,779,214 5 Thailand Futures Exchange 2,903,950 6 Pakistan Mercantile Exchange 1,669,372 7 Dubai Gold & Commodities Exchange 733,821 8 Indonesia Commodity & Derivatives Exchange 162,318 9 Taiwan Futures Exchange 111,875 10 National Commodity&Derivatives Exchange 16,737 Source: FIA 4-6 JUNE 2017 7
Development of Gold Futures in Thailand 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Contracts/ 2017 (5M) day Mar 09 Aug 25, 11 10,398 Contracts/day 4 Gold Dealers 100,000 Highest Volume Feb 09 Become TFEX 92,475 contracts Launch July 14 2017 Q3 members 50THB GF • Extend Night Introduce Gold 80,000 Jan 10 Jun 10 Physical Session till midnight +1 Gold Dealer • Gold -D Expand Night Session Exchange Become TFEX 19:30 – 22:30 hrs 60,000 Service members Aug 10 Launch 40,000 10THB GF 20,000 0 2009 2010 2011 2012 2013 2014 2015 2016 201 10-THB Gold Futures 50-THB Gold Futures 8 4-6 JUNE 2017
TFEX Gold Futures 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Underlying asset : Gold bullion with purity 96.5 % Contract Size : 152.44 grams 762.20 grams ( ~ USD 29,000) (~ USD 5,800) Volume/day in 2017 (5M) Settlement Method : Cash Settlement (Contract) Contract Month : 3 nearest even months 9,764 635 Final Settlement Price: 10-THB Gold 50-THB Gold LBMA Weight adj. Purity adj. x x Futures Futures Gold AM Fixing 15.244 / 31.1035 0.965 / 0.995 Remark 4-6 JUNE 2017 9 1 Baht Gold = 0.49 Troy Ounces or15.244 grams
Trading Statistics 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • Total trading of Gold Futures in 2017 is 10,398 Contracts/day (as of May) • Majority of investors are local investors and domestic institutions • 46% of trading occurs during night session (19:30 – 22:30 hrs.) Daily Average Volume (Contract/day) Investor Type Local Investor 5,184 6,480 47% 5,530 Foreign 5,155 Investor 5,237 8% 2017 3,311 6,045 5,441 5,263 4,543 5M 3,278 1,804 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Local Institutions Night Session Day Session 45% 4-6 JUNE 2017 10
Arbitrage opportunity with global gold price 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE USD / tOz 1,400 1,350 1,300 1,250 1,200 1,150 1,100 1,050 TFEX Gold CME Gold Source: Thomson Reuters 4-6 JUNE 2017 11
Outline 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • Gold Trading Landscape in Thailand • TFEX Gold Futures • Upcoming development 4-6 JUNE 2017 12
Extending Night Session 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE • In Q3/2017, TFEX will expand the night session trading hours for Gold Futures from 7:30 pm – 10:30 pm to 7:00 pm – 23:55 pm. in order to increase overlap trading time with other major exchanges. BKK Time 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 TFEX GMT+7 SHFE GMT+8 MCX GMT+5.5 TOCOM GMT+9 DGCX GMT+4 CME GMT-6 4-6 JUNE 2017 13
TFEX Gold-D: a deferrable physical delivery contract 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Underlying asset : Gold bullion with purity 99.99 % Contract Size : 100 Grams ( 3 . 2148 Troy Ounce) Delivery Unit : 1 ,000 Grams or 10 Contracts Eligible Asset to Delivery : 1 Kilobar of LBMA bar Contract Month : 1 quarterly month Trading price : USD/Oz. Storage: Secure gold vault as assigned by exchange Tick size : 0.1 USD/Oz. The vault charge very low storage fee at only THB 1 /k.g./day. (approx ≈ 0.018% per year) (approx 0.32 USD/Tick) 4-6 JUNE 2017 14
Precious Metal Product in TFEX 4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Gold Futures Gold-D (Deferred Spot) 10-THB 50-THB 96. 5 % 99.9% Purity 10 Thai Gold Baht 50 Thai Gold Baht Contract Size 100 grams (152.44 grams) (762.20 grams) Trading Price THB USD 10 0.1 Tick Size Contract Months 3 nearest even months 1 nearest quarterly month Settlement Method Cash Settlement Physical Delivery Delivery Unit NA NA 1000 grams 5,800 29,000 40,000 Appx. notional value (USD) 9,368 6 3 Volume per day (Contracts) coming soon 4-6 JUNE 2017 15
4-6 JUNE 2017, GRAND COPTHORNE, SINGAPORE Thank you 4-6 JUNE 2017 16
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