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Friday, October 4, 2013

Gold futures trading on Bursa from Monday (Update)


KUALA LUMPUR: Bursa Malaysia will begin gold futures trading on Monday Oct 7, marking a move to offer precious metal futures, and thereby deepening of the capital markets in Malaysia.

This is the first precious metal futures contract on Bursa Malaysia. The underlying asset class will be based on London Fix Gold specifications.

The contract size is 100 grams and the price will be quoted in ringgit. The contract code is FGLD (gold futures contract) while the terms is cash.

“Shorting of contracts will be allowed,” it said on Thursday.

Bursa Malaysia Derivatives Bhd CEO Chong Kim Seng said in Malaysia, where gold is a highly desirable commodity from a cultural standpoint, the minimum contract size of 100 grams for the Bursa Gold Futures Contract provides greater accessibility and affordability to all those who want to trade and invest in gold.

“Gold jewelers, manufacturers and stockists are anticipated to be active users of the Bursa Gold Futures Contract to hedge their gold inventory risks and their forward gold purchases.

“The Ringgit denomination minimises the risks associated with foreign currency fluctuations thereby providing convenience and flexibility to trade gold futures on Bursa Malaysia,” said Chong.

Bursa Malaysia Berhad CEO and the Chairman of Bursa Malaysia Derivatives Datuk Tajuddin Atan said the launch of the new Bursa Gold Futures Contract underscores the commitment of Bursa Malaysia to continuously introduce new products and asset classes, thereby bringing more trading and investment opportunities to more Malaysians.

“Our aim is to create a comprehensive marketplace where there is something for every type of trader and investor on Bursa Malaysia. We are confident that the new Bursa Gold Futures Contract, because it is traded on our highly regulated exchange, will become the trusted way to trade gold in Malaysia,” he said.

Bursa Malaysia urged retail investors to open gold futures trading accounts only with licensed future brokers.

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