HKEx CEO says close to picking new LME chief
HONG KONG (Reuters) - Hong Kong Exchanges and Clearing Ltd (HKEx) (0388.HK) is close to picking a new CEO for the London Metal Exchange and will make an announcement in due course, Chief Executive Charles Li said on Thursday.
HKEx, which bought the LME last year, has narrowed the field to three contenders for the chief executive post when Martin Abbott leaves at the end of this year.
The exchange is choosing from among its chief operating officer, Diarmuid O'Hegarty, Garry Jones, a former CEO of NYSE Liffe, and Martin Pratt, chief operating officer at metals trader Triland, market sources have said.
As for litigation related to the LME's warehousing business, Li said it was unclear how long it would last or how much it would cost.
The LME has been named in several class action lawsuits accusing banks and large commodity traders of hoarding metal in warehouses and driving up the prices of industrial products.
"We do not have sufficient information to determine how long it will last or what the costs will be, but it's clear in our mind that this litigation is baseless," Li told reporters at a press conference in Hong Kong.
He also said that he believed in the LME warehouse system, but that the exchange was open to change.
"We fundamentally believe in the warehouse system which has developed over years. But if the market believes there are ways we can change, we will consider them," Li said.
A final decision on whether to implement the changes is expected to be made at a scheduled LME board meeting in October. If the proposal is adopted, the new rules would come into force on April 1 next year.
HKEx said earlier on Thursday that profit from its LME business came to HK$267 million ($34 million) for the first half of 2013, driven by a hike in trading fees as the LME moves to commercialize its business model.
Last year, the LME made a HK$29 million ($3.7 million) core loss due to management payouts and other costs related to the sale, while its group revenue and other income was HK$976 million for 2012.
HKEx said the major sources of revenue from the LME were trading fees, commodity market data fees and other ancillary fees. It has vowed to freeze the LME fee structure until the start of 2015, but is widely expected to raise fees for trading, and clearing after that.
The LME's market data fees contributed HK$88 million ($11 million) while commodities stock levies and warehouse listing fees contributed HK$60 million ($7.7 million).
Overall, HKEx's second-quarter net profit rose 9 percent, driven by higher trading volumes and a pick-up in initial public offerings.
(Reporting by Lawrence White and Clare Baldwin.; Additional reporting by Melanie Burton in SINGAPORE; Editing by Chris Gallagher)
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