Hong Kong’s local gold exchange to work with ICBC in launch of Shenzhen services
Warehousing and physical settlement service planned for Qianhai free trade zone
The Hong Kong gold exchange has teamed up with Industrial and Commercial Bank of China (ICBC) to launch gold trading services in the Qianhai free trade zone in September, providing custodial and physical settlement service targeted at commercial users and precious metals traders, according to the exchange head.
Haywood Cheung Tak-hay, the honorary permanent president of the 105-year-old Chinese Gold and Silver Exchange Society, said the exchange has teamed up with ICBC to use its gold vault in Qianhai as a temporary bonded warehouse for Hong Kong traders and manufacturers to store their gold. The service is considered useful for companies using gold to fashion decorative items, as the yellow metal can be stored before being fashioned into jewellery and other gold products at factories in Shenzhen.
The local gold bourse plans to build a HK$1 billion permanent gold vault facility, including a bonded warehouse, trading floor and related offices areas in Qianhai, however the project will take two years before completion, according to Cheung.
“ICBC is the largest of 15 gold importers authorised in mainland China. It is the largest bank in the mainland and has an international branch network which could provide bank clearing and settlement services,” Cheung said.
“ICBC’s Macau branch also handles gold import and export services. Teaming up with ICBC would connect Hong Kong, Macau, Qianhai and Shenzhen as a gold trading hub,” he added.
The Chinese Gold and Silver Exchange Society partnered with the Shanghai international gold board last year to provide gold trading and custodial services. Twenty-one Hong Kong financial companies are authorised to trade gold in Shanghai.