The international forum for commodities, derivatives and emerging markets in Geneva on September 22 – 24, 2015 was hosted by The Swiss Futures and Options Association (‘SFOA’). Now in its fourth decade, this Bürgenstock Meeting continues the tradition of attracting high-level speakers from across the globe to for high-level debate and discussion. More than 200 delegates from across the planet from international exchanges, derivatives trading firms, physical commodities traders, support and professional services firms participated this year’s meeting.
Muammer Çakır, Head of Derivatives Market – VIOP, Borsa İstanbul was a panellist at the Emerging Exchanges Panel, chaired by Chris Sturgess, Director of Commodities at JSE, South Africa. The panellists; Kristian Schach Moller, CEO of Agricultural Commodity Exchange for Africa (ACE) Malawi, Ismael Caram, Deputy CEO, Rosario Futures Exchange, Argentina, Louisjan Bonthuys, Director, STT, South Africa and Patrick Kenny, SVP, CQG discussed the latest opportunities for the emerging markets and the efforts involved to advance not only internal markets but also initiatives to encourage regional trade, commodities and derivatives.
“Turkey is a dynamic economy on the doorstep of Europe. It has good connections to Africa via Turkish Airlines which flies more countries in Africa than any other airline in the world. Additionally, the Turkish economy is not dependent on commodities and is a net oil importer, so it will be well positioned among the EM countries once the current turbulence is over.” Çakır said.
Çakır spoke of the very high ratio of retail trading (64%) in the overall derivative volumes in Turkey. “It is more of speculation rather than hedging which can be very harmful for the markets in the long run. Thus, the exchange is trying to educate investors and corporates about hedging techniques and to establish hedging culture. The exchange is running simulation programs in order to train investors on how to use futures and options in a simulated environment. Additionally, Borsa İstanbul is focused on physically delivered commodity derivatives for that purpose.”
Çakır also mentioned the robust risk management practices in Turkish Capital Markets, saying, “Takasbank, the clearing house of Turkey, is the CCP for derivatives, and it is planned to become CCP for spot markets in the coming years. The system in place is very safe; there is total client account segregation with prefunding and end-client level gross margining. However, all these sound risk management practices, albeit safe, take its toll on the volumes in Turkish derivatives market.”
Çakır concluded his speech by talking about areas of opportunity for Borsa İstanbul. “First, it is essential to increase the institutional flow to peer standards by increasing the foreign investors’ ratio. Second is the FX markets which is quadrupled in volume in the last 2 years at Borsa İstanbul VIOP, but there is much more room for growth. Third, commodities with physical delivery via licensed warehousing system and energy contracts.”
Borsa İstanbul Derivatives Market (VIOP) is the region’s leading and most liquid derivatives marketplace where the investors and corporates come to manage their risk. VIOP offers the widest range of regional benchmark products across all major asset classes, including futures and options based on equity indices, currencies, interest rates, precious metals, commodities and energy with a central counterparty clearing service.
For more information, please visit http://www.borsaistanbul.com/en/viop
For more info on the event, please see http://www.sfoa-events.org/burgenstock-2015/
