Tag Archives: futures markets

Regulators Take Aim At Commodities Speculation In Anti-Inflation Drive

With inflation hitting a two-year high in September, China’s economic policymakers are taking steps where ever they can to stall the rise in prices, particularly of food and property. Securities regulators are now pushing for curbs on commodity futures trading in the hope of damping down excessive speculation (the ever-present bugaboo when commodity prices rise). The Shanghai Futures Exchange is raising its margin requirements on natural rubber contracts to 11% from 8% while the Zhengzhou Commodity Exchange has already raised margins for rice, wheat, rapeseed oil and sugar to 8% from 3% or 4%. Rice and rubber futures hit record prices this week. along with those of cotton.

The new margin requirements follow the central bank’s surprise rise in benchmark interest rates earlier this month, and a raft of measures over months and months to let down the property price bubble inflated by the liquidity the government pumped into the economy in the wake of the global financial crisis. We would expect central controls on commodities trading if the self-regulation of the exchanges fails to drive down prices.


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Is That Chi For China Or Chi For Chicago?

HuaMei Capital touts itself as the first U.S. financial services company jointly owned by a Chinese company. Hence the name, ChiAm or ChinaAmerica. It is based in Chicago and Beijing, and has just opened its doors for business.

It will provide cross-border M&A services for mid-sized firms in both countries and find private equity and real estate investments in China for American investors. It principals are former Illinois senator Adlai Stevenson III, futures markets authority Leo Melamed, China Merchant Securities and MVC Capital, Michael Tokarz’s New York M&A boutique.

Given that HueMei will also offer risk management and proprietary trading for its clients and Melamed’s long association with Chicago’s derivatives markets, expect a fair chunk of Chinese money to head in that direction.

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