Trieu Phong to operate first commodity exchange

Deputy Minister of Industry and Trade Ho Thi Kim Thoa (L) presents the commodity exchange license to TPE chairperson Bach Thuy Ha in HCMC on Wednesday - Photo: Mong Binh HCMC - Trieu Phong, a HCMC-based company active in commodities, gold, real estate, and financial operations, has received a license from the Ministry of Industry and Trade to operate Trieu Phong Commodity Exchange (TPE), the first of its kind in the country. Deputy Minister of Industry and Trade Ho Thi Kim Thoa said before delivering the license to TPE chairperson Bach Thuy Ha at a function in HCMC on Wednesday that the commodity exchange would carry out transactions for coffee, rubber and steel as a test on how it would work. “We are very prudent to license TPE as this is the first commodity exchange licensed by the ministry,” Thoa said. She expected that TPE would be a new playground for local and foreign investors as well as promote outbound sales of Vietnamese commodities. TPE general director Nguyen Duy Phuong said TPE would operate as a joint-stock company with initial chartered capital of VND150 billion (some US$7.7 million). The company would have its trading center operational in HCMC early next year before opening a facility in Hanoi. The company will offer investors services linked to commodity futures contracts and options for commodity swap as well as brokerage, goods evaluation, transactions, investment consulting, risk management, derivatives and financial support. In addition to trading management, Phuong said TPE would have departments responsible for overseeing commodity transactions and assessment in collaboration with local and foreign partners including the banks BIDV and Techcombank to help both buyers and sellers avoid risks in their deals. Phuong underscored the importance of commodity assessment for customers, particularly buyers as this service would enable them to reduce costs for storage before having goods assessed, and help Vietnam improve competitiveness for its export commodities on the global market. The future traders at TPE’s facilities will be corporate members of Vietnam’s associations of coffee, rubber and steel – the three commodities to be traded on the exchange in the initial time. TPE is now mapping out a plan to approach farmers and households through the local banks that finance their farming. “We will work with banks and business associations to organize seminars to spread relevant information and offer them tools to boost their farming efficiency,” Phuong said. Phuong said one of the focuses in TPE’s strategy was to develop human resources to run the trading center smoothly and that experts would be invited to run courses on commodity exchanges for the company’s employees. The company will invest in a system to manage risks and transactions after its heavy spending on trading infrastructure, technology and solutions for transactions. The company planned to double its charter capital to VND300 billion (some US$15.4 million) by 2012 and VND1 trillion by 2015, and gets listed on the local bourse by 2014, Phuong said before signing agreements with strategic partners at the event on Wednesday. The partners of TPE include BIDV, Techcombank, SME Securities, and CWT Commodities based in Singapore.