MXV boosts goods transaction linkages between Viet Nam and ASEAN

Under the theme: "Navigating the new market regime: From macro analysis to trade idea generation," the event drew the attendance of 200 delegates including global experts, representatives from regional exchanges, as well as investors, brokers, and traders in the commodity derivatives trading sector.

This is also the first time that MXV cooperated with the three leading stock exchanges in the ASEAN including the Singapore Exchange (SGX), the Indonesia-based Asia Commodity Marketplace (ACM) and Bursa Malaysia Derivatives Berhad (BMD) to share practical experiences in operating commodity trading and integrating global trading connections.

MXV Deputy General Director Nguyen Duc Dung said that the annual training session aimed to introduce practical knowledge and insights from the commodity trading markets to businesses and investors in Viet Nam.

Following the success of the training program themed "Risk Management for Commodity Derivatives," that was held last July, the MXV continued to support its traders with essential tools to raise their analytical capabilities and develop effective trading strategies.

Valuable expertise for investors

Mr. Andy Tan, CEO of Inspirante Trading Solutions (ITS) said that in community trading, it is necessary to apply a comprehensive approach which combines macroeconomic analysis, technical analysis, arbitrage trading strategies, and risk management to draft effective trading plans.

Specifically, ITS applies a top-down analysis method, starting with global economic trends before delving into specific industries and commodities. The approach focuses on examining key economic indicators such as GDP growth, inflation, monetary policy, and geopolitical tensions to forecast their impact on the commodity market.

Experts from ITS also shared practical examples to help participants to raise their analytical capabilities and develop effective trading strategies.

For example, the silver market and gold market are closely related. If prices of gold tend to increase in the long term, silver costs will also go up because the raw material is widely used in industrial production, so an economic recession can slow down the demand for silver. However, from the perspective of safe haven assets, when gold prices rise, silver prices tend to rise as well.

Regarding practical experiences in the process of operating and connecting interlinked rubber transactions—where rubber products traded on SGX account for 90 percent of the total open interest in the market, Mr. Kenneth Ng, a director and expert in commodities, securities, and FICC at SGX, said that the average daily trading volume of TSR20 rubber futures contracts on SGX reaches approximately 16,000 lots, reflecting strong demands from investors and manufacturing businesses.

SGX's provision of futures and options contracts for TSR20 helps businesses prevent risks, stabilize production costs, and optimize their trading strategies.

Marketing and Retail Client Development Director of BMD, Ms. Esther Tio, analyzed the characteristics of palm oil contracts. Currently, BMD is the world's leading palm oil trading hub, accounting for 97 percent of the liquidity in crude palm oil futures (FCPO) contracts.

FCPO is traded in units of 25 tons per contract, listed in Malaysian Ringgit (MYR), and is available for trading in three sessions per day, including a night session, to meet international demand. FCPO prices often quickly reflect global supply and demand fluctuations and are influenced by factors such as export tax policies, weather conditions, Malaysian Ringgit volatility, and demand from China and India.

BMD experts also shared insights on the crude palm oil delivery process, which includes comprehensive inspection, storage, and delivery systems to ensure quality. These experiences serve as valuable lessons for countries like Viet Nam in developing their commodity trading and delivery systems.

ACM Exchange representative, Ms. Cindy Olyvia – Deputy Director of Business at ACM, introduced the Nano Contracts futures, which feature low margin requirements and smaller trading sizes, making them more accessible to individual investors compared to standard metal contracts on the London Exchange. Currently, ACM trades Nano Contracts in three product categories namely platinum, silver, and copper. 

Currently, ACM is trading Nano Contracts with three types of products: platinum, silver, and copper. MXV is ACM's first foreign partner to jointly implement this type of contract. ACM hoped that through the cooperation between ACM and MXV, the open interest from MXV will account for approximately 20 percent of the total open interest in Nano Contracts trading. As a result, MXV can expand its operational scope and enhance the attractiveness of the derivatives commodity market in Viet Nam./.