BEIJING: China is set to launch a much-anticipated yuan-denominated crude oil futures contract in two weeks, and institutions have been preparing their clients for it.
Futures companies are offering training to clients, helping companies better understand how the financial product can mitigate risk, Gu Jingtao, an analyst with Chinese investment bank BOCI, told the Economic Observer, reports Xinhua."The launch of the oil futures will greatly improve the risk management capability of small and medium-sized firms," Gu said.
Futures brokerages have been competing for clients while testing technical systems to ensure smooth trading, according to Jia Shuchang of Industrial Futures, the Economic Observer reported.
China will launch the long-awaited crude oil futures contract on March 26 at the Shanghai International Energy Exchange, China Securities Regulatory Commission announced in February.
Preparations are almost complete, and there have been several system tests ahead of the launch.
Analysts say Shanghai crude will be able to compete in the benchmark Asia-Pacific region, hopefully becoming part of the 24-hour global trading system, together with Brent and WTI futures.