With a view to help customers manage the price risk associated
with the Chinese construction and rebar industries,
CME Group Inc.
) has announced the launch of Chinese Steel Rebar HRB400 (Mysteel)
Swap Futures. The trading of these futures, which will be listed on
CME's subsidiary NYMEX, is slated to commence on October 15,
The futures will be denominated in U.S. Dollars and will be
cleared by CME ClearPort. These will be subject to the rules and
regulations of NYMEX. However, the launch is dependent on the
attainment of regulatory approval.
This is the first CME product based on the price data services
of Mysteel - China's leading provider of ferrous price and indexing
services. The two companies had announced a joint agreement in
January this year, to develop risk management products for the
ferrous industry based on Mysteel's market-leading price data
The new futures are aimed at meeting the demand for a product
that can help manage the impact of the instability in steel prices.
Rebar HRB400 is a 20mm ribbed steel bar that is required by the
construction industry for concrete reinforcement. Apart from
managing steel price volatility, the new futures will also protect
clients from counterparty credit risk.
CME keeps launching new futures to expand its range of benchmark
products. The exchange has the most diverse product range, which is
a result of continued innovation and evolution as well as mergers
Earlier this month, CME introduced a new genre of futures
contracts that will be linked with deliverable interest rate swaps
(IRS). These new IRS futures, which are scheduled to launch on
November 13, 2012, will be listed on Chicago Board of Trade (CBOT)
and be regulated by Commodity Futures Trading Commission
Prior to that, CME announced the launch of the Brazilian
Ibovespa Futures in the U.S. from October 22, 2012. Ibovespa is
already traded on the Brazilian Stocks, Mercantile & Futures
Exchange (BM&FBOVESPA). Now it will be traded in U.S. Dollars
denomination and will be listed on CME.
CME, which competes with other exchanges such as
NYSE Euronext Inc.
Nasdaq OMX Group Inc.
), currently carries a short-term Zacks #4 Rank (Sell). Considering
the fundamentals, we maintain our long-term 'Neutral'
recommendation on the stock.
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