This morning (March 19), in Hanoi, the Vietnam Commodity Exchange (MXV) organized a training course for MXV's business members and brokerage members.
The event was attended by nearly 200 delegates including experts from around the world, representatives of regional exchanges, investors, brokers, and traders from MXV member companies.
In particular, the training session also welcomed two representatives from the Indonesian Commodity Futures Trading Regulatory Agency (BAPPEBTI) - the unit responsible for managing and supervising the domestic derivatives trading market and the Commercial Attaché, Embassy of Indonesia in Vietnam.
This is also the first time that MXV and three leading commodity exchanges in the ASEAN region, namely Singapore Commodity Exchange (SGX) from Singapore, Asia Commodity Marketplace (ACM) from Indonesia and Brusa Malaysia Derivatives (BMD) from Malaysia, have gathered and shared practical experiences in commodity trading operations and connecting transactions with the world.
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| Event Overview |
Top - down analysis method
At the beginning of the training session, Mr. Nguyen Duc Dung, Deputy General Director of MXV, said that this training program is an annual event to bring knowledge and practical values of the commodity trading market to businesses and investors in the Vietnamese market.
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| Mr. Nguyen Duc Dung - Deputy General Director of Vietnam Commodity Exchange (MXV) |
Following the success of the training program "Derivatives Portfolio Risk Management" in July 2024, this year MXV continues to implement the training program "Market analysis methods and trading idea development", with more in-depth content to help market members improve their analytical capacity and build effective trading strategies.
Mr. Andy Tan - CEO of Inspirante Trading Solutions (ITS) believes that in commodity trading, a comprehensive approach is needed, combining macro analysis, technical analysis, arbitrage trading strategies and risk management to build an effective commodity trading plan.
Specifically, ITS has introduced a top-down analysis method (from macro to micro), which means starting with global economic trends and then delving into specific industries and commodities. In particular, ITS focuses on examining important economic indicators such as GDP growth, inflation, monetary policy and geopolitical tensions to predict the impact on the commodity market.
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| Mr. Andy Tan - CEO of Inspirante Trading Solutions Pte Ltd (ITS) |
For example, when the US Federal Reserve (Fed) started its interest rate cut cycle in September 2024 due to a downward trend in inflation, it led to a weakening of the US dollar, thereby boosting the prices of USD-denominated commodities such as crude oil, precious metals and agricultural products.
Mr. Wan ZuHao - ITS Research Analyst also gave specific examples of factors affecting iron ore, wheat and silver trading, thereby proposing reasonable trading strategies to help investors in Vietnam better understand the content conveyed.
For example, the silver market, gold and silver are closely related. If the price of gold tends to increase in the long term, silver will also be pulled along. From an industrial production perspective, silver is widely used in industrial production, so an economic recession can slow down the demand for silver. However, from a safe-haven asset perspective, when the price of gold increases, silver will also increase accordingly.
Regarding the macro economy, Mr. Wan ZuHao said that it is very difficult to predict in the current situation, especially when Mr. Donald Trump returns to the White House. ITS also has to constantly monitor information from press sources to be able to adjust its own forecast.
To clarify the iron ore market, Mr. Kenneth Ng - Director, commodity, securities and FICC specialist of SGX provided more information about the steel production value chain. Currently, SGX is the leading iron ore trading center - a raw material for steel production - in Asia with a trading volume of 5.8 billion tons per year.
Mr. Kenneth Ng said that the benchmark iron ore futures contract on SGX is three times larger than the actual iron ore trading volume transported by sea. Notably, manufacturing enterprises in the industry only account for 26.3% of the contract trading volume. Meanwhile, financial institutions account for 57.3% of the trading volume due to their superior performance compared to other asset classes.
Diversified investment items for traders
Sharing practical experiences in the process of operating and connecting rubber transactions - a product traded at SGX that accounts for 90% of the total open positions of the entire market.
He said the average daily trading volume of the TSR20 rubber product futures contract on SGX reached about 16,000 lots, reflecting strong demand from investors and manufacturing businesses.
SGX's provision of TSR20 futures and options helps businesses hedge risks, stabilize production costs and optimize trading strategies.
At the training session, BMD’s Director of Marketing and Retail Customer Development, Ms. Esther Tio, also introduced Vietnamese traders to the characteristics of palm oil contracts. Currently, BMD is the world’s leading palm oil trading center, accounting for 97% of the liquidity of crude palm oil futures (FCPO).
FCPO is traded in 25-ton units per contract, quoted in Malaysian Ringgit (MYR), and traded three times a day including the night session, to meet international demand. FCPO prices often quickly reflect global supply and demand fluctuations, influenced by factors such as export tax policies, weather, fluctuations in the Malaysian Ringgit and demand from China and India.
BMD also shared about the crude palm oil delivery process, with full inspection, storage and delivery systems to ensure quality. This is also an experience for countries, such as Vietnam, in the process of building a real goods transaction and delivery system.
In addition, BMD has a close partnership with CME Group, providing derivative products on commodities, stock indices, currencies and precious metals to give investors easy access to international markets.
ACM Exchange representative, Ms. Cindy Olyvia - ACM Deputy Director of Business introduced Nano Contracts futures contract, with low margin ratio, small transaction size, this product will be more accessible to individual investors than standard metal contracts on the London Stock Exchange.
Currently, ACM is trading Nano Contracts with 3 types of products: platinum, silver and bronze. MXV is the first foreign partner of ACM to deploy this type of contract.
Since the launch of Nano Contracts, the contract has attracted about 400 - 500 open positions per day in the Indonesian market alone. ACM expects that with the cooperation between ACM - MXV, the number of open positions from MXV will account for about 20% of the total open positions of this Nano Contracts transaction. Thanks to that, MXV can expand its scope of operations and increase the attractiveness of the derivatives market in Vietnam.
Source: https://congthuong.vn/tao-dong-luc-lien-ket-giao-dich-hang-hoa-giua-viet-nam-va-asean-379014.html
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