ANZ Seeks Role in Pilot Global Gold Trading Platform in Shanghai

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By Vittorio Hernandez | June 2, 2014 8:55 AM EST

A global gold-trading platform is being planned in the pilot Shanghai free-trade zone, and ANZ Bank wants to play a role in it. The trading platform is seen as a potential challenger to the London and New York exchanges.

The Shanghai Gold Exchange (SGE) was given by green light by China's central bank in May to launch a board for gold trade in the 28-square kilometer area.

"We are very keen to play a role in such a setup ... We have a pretty established presence in that area, which clearly benefits from Australia being a major gold producer, and we have our parent bank's capabilities," The Wall Street Journal quoted Charles Li, chief executive of the China operations of ANZ, one of the first foreign banks to become an active market maker in the country's existing gold exchanged closed to onshore members.

Li said the extension of the gold exchange to the free-trade zone is a natural step to bring China's and the global gold market together.

Besides ANZ, Westpac Bank also got licences from the People's Bank of China to be market makers to have a direct trading of the Chinese and Australian currencies, and in 2014, included the New Zealand kiwi.

ANZ has six branches in China, including in the capital city of Beijing. Just this week, it opened the sixth branch in Chengdu, West China.

SGE has actually approached other global banks such as HSBC, Standard Bank Standard and Bank of Nova Scotia to participate in its trading platform, reported the Sydney Morning Herald.

Industrial Bank analyst Jiang Shu said that China is seeking a greater voice in gold prices and the SGE is the first step towards that. Shu explained, "If you don't allow foreign players to participate in your market actively, or do not push Chinese financial institutions to participate in the international market, then China's strong gold demand is only a number, not a power."

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