N.Z. growth

Press, 12 May 1984, Page 22

N.Z. growth

Wool futures trading began in New Zealand under the auspices of the London Wool Terminal Market Association. New Zealand companies were offered affiliate membership. Trading began in 1979 in the LWRMA New Zealand Crossbred Wool No. 2 contract, with only one facility, the floor in London. Most of the trading was in New Zealand, and in June 1980, New Zealand members were granted trading affiliate membership and a daily telephone conference-call system was begun in New Zealand. At first, because the market was still London based, and was cleared in London, albeit in New Zealand currency, the Reserve Bank Limited trading in New Zealand to hedgers — those with a genuine interest in the commodity. However, in December, 1980, all New Zealand residents, speculators as well as hedgers, were allowed to trade in the contract. Shortly after this the LWTMA changed its name to the London, New Zealand Futures Association. This was in part recognition of the evolution of the market into the first in the world offering 24-hour, round-the-clock trading, in two centres. At the same time New Zealand affiliates were allowed to buy floor membership. ■ At present, turnover} of more than 100 contracts a

day is common. Other futures contracts which have been considered for New Zealand, but not introduced have included those based on kiwifruit, lumber, krugerrand, and fat lambs. Other futures trading has been considered for New Zealand. The London, New Zealand Futures Association, which administers the wool-futures trading, has considered introducing contracts based on kiwifruit, lumber, krugerrand, and fat lamb. None has got off the ground. Observing the growth of the big futures markets overseas, the seven floor members of the LNZFA set up a separate organisation: New Zealand Commodities Market, Ltd. It is this organisation which is promoting the development of the new futures markets in New Zealand.

This week’s market, Page 24