By Matthew Cowley
LONDON--Hong Kong Exchanges & Clearing Ltd. (0388.HK) and
its U.K. unit, the London Metal Exchange, have signed a preliminary
agreement with China Merchants Group Ltd. to explore business
opportunities in Asia, the companies said Thursday.
The memorandum of understanding "demonstrates our continued
commitment to expanding the LME's business and user base in Asia,"
HKEx's co-head of global markets, Romnesh Lamba, said in a
statement.
The deal comes just a month after the LME signed a similar
preliminary agreement with China Construction Bank Corp. that is
also aimed at pushing into Asia.
The two groups will explore initiatives such as LME warehousing
in Asia and the development of new products denominated in Chinese
yuan, said Matthew Chamberlain, the LME's head of business
development.
London aims to become one of the major trading hubs for the
yuan, as the Chinese government seeks to make the currency more
global. Earlier this year the Bank of England and People's Bank of
China reached an agreement to clear and settle Chinese currency
trades in London.
The groups will look to combine China Merchants Group's
expertise in the logistics and warehousing sector in China with the
LME strategic role in the base metals trading marketplace, the
statement said.
"We see this strategic cooperation as an important step to
implement China Merchants Group's strategy of integrating its
industrial and financial services capability," added Wang Yan,
chief executive of China Merchants Securities Co. (600999.SH).
Write to Matthew Cowley at matthew.cowley@wsj.com