Deutsche Börse in tripartite deal to create new Chinese exchange
Deutsche Börse strengthened its links with mainland China this week with the establishment of a partnership with the Shanghai Stock Exchange and China Financial Futures Exchange to create new marketplace for the trading of renminbi-denominated offshore products under the new brand of the China Europe International Exchange.
The deal creating the new Frankfurt-based exchange – dubbed Ceinex – was signed this week in Beijing by representatives of the three partners in the presence of Chinese Prime Minster Li Keqiang and German Chancellor Angela Merkel, and was quickly followed by the announcement of agreements with Bank of China and China Construction Bank to explore the potential for cooperation.
The new exchange will offer investment products based on Chinese underlyings to international investors, starting with cash market products such as exchange traded funds and bonds. All cash market instruments will be tradable through Deutsche Börse’s Xetra platform.
Gui Minjie, chairman of the Shanghai exchange, described the new venture as “another crucial milestone in the opening up of the Chinese capital markets”.
Working with BoC, the new exchange will jointly design the RMB payment and settlement process for newly listed products using the bank’s infrastructure. BoC will also facilitate access to Ceinex products for customers from China and other Asian markets.
In the deal with CCB, one objective is to jointly develop RMB denominated financial instruments for trading on Ceinex, particularly Chinese securities, offshore RMB bonds as well as RMB denominated ETFs.