15th FloorExchange Square Bukit Kewangan Telephone 6032034 7000 6032732 4999 50200 Kuala Lumpur ID: 872152
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MEDIA RELEASE 15th Floor, Exchange Square, Bukit Kewangan Telephone: 603-2034 7000, 603-2732 4999 50200 Kuala Lumpur Fax: 603-2026 3684 PO Box 11023, 50670 Kuala Lumpur, Malaysia Website: www.bursamalaysia.com 9 January 2008 BURSA MALAYSIAS US DOLLAR CRUDE PALM OIL FUTURES (FUPO) BROADENS ITS DERIVATIVES OFFERINGS AND WIDENS INVESTOR BASE Bursa Malaysia plans to launch its US Dollar-denominated crude palm oil futures contract known as FUPO this year. FUPO is aimed to attract more foreign traders and investors who wish to trade in the US dollar currency. Dato Yusli Mohd Yusoff, CEO of Bursa Malaysia Berhad, said, The wide appeal of our Ringgit-denominated crude palm oil futures contract (FCPO) has spurred us to expand our offerings in the derivatives market with products such as FUPO. This new derivatives product not only provides an opportunity for us to further globalise our futures market but also positions Bursa Malaysia as an internationally competitive marketplace for futures trading. FUPO is a cash settled contract that uses FCPOs settlement price. Bank Negaras currency exchange rate will be used in calculating the Final Settlement Value which will add transparency to the price. The introduction of FUPO is part of the exchanges plan to grow the derivatives market for 2008. Looking at the success of FCPO which traded 2.8 millioncontracts for the year ended 31 December 2007, we are optimistic that FUPO will attract new contracts to be traded and increase more market players in the palm oil derivatives market, Dato Yusli added. With FUPO, current local and CPO traders will have additional opportunities to trade in USD and arbitrage between FCPO and FUPO. In addition, FUPO will be useful for traders interested in foreign funds, commodity funds as well as hedge funds, as they will be able to maximise on price discrepancies between commodities, markets, delivery dates and locations. Potentially bio-fuel producers and users, shipping and freight companies, food manufacturers and restaurant chains, as well as commercial banks, can benefit from FUPO as they will be able to hedge prices of raw materials, palm oil shipment, cooking oil price and commercial loans. FCPO on Bursa Malaysia is widely regarded as the global benchm
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ark for palm oil prices, and has attracted strong interest from foreign investors, including hedge funds over the past year. Dato Yusli added, Looking at the sustained demand and strong performance by palm oil-based companies, I am optimistic of FUPOs potential due to its strong, attractive features, and its leverage from the popular FCPO. MEDIA RELEASE 15th Floor, Exchange Square, Bukit Kewangan Telephone: 603-2034 7000, 603-2732 4999 50200 Kuala Lumpur Fax: 603-2026 3684 PO Box 11023, 50670 Kuala Lumpur, Malaysia Website: www.bursamalaysia.com FUPO Contract Specifications: Contract Code FUPO Settlement Methodology Cash settled Contract Unit 25 metric tons Minimum Price Fluctuation USD 0.25 per metric ton Contract Months Spot month and the next 5 succeeding months, and thereafter, alternate months up to 24 month ahead Trading Hours First Trading Session: Malaysian Time: 10:30 a.m. to 12:30 p.m. Second Trading Session: Malaysian Time: 3:00 p.m. to 6:00 p.m. Final Trading Day Contract expires at noon on the 15th day of the spot month, or if the 15th is a non-market day, the preceding business day Final Settlement Cash settlement based on Final Settlement Value For more details on FUPO specifications, please contact derivatives@bursamalaysia.com -End- Bursa Malaysia Berhad is a public company limited by shares under the Companies Act 1965. Bursa Malaysia is an approved exchange holding company under Section 15 of the Capital Markets and Services Act 2007. Other companies in the Bursa Malaysia Berhad Group of companies include a stock exchange, a derivatives exchange, an off-shore international financial exchange, equity and derivatives clearing houses, a central depository, an information services provider and an Information Technology services provider. Bursa Malaysia Securities Berhad, a wholly-owned subsidiary of Bursa Malaysia Berhad, is an approved stock exchange under Section 8 of the Capital Markets and Services Act 2007. Issued by Bursa Malaysia. Delyana Nordin Liew Shuk Yin Manager, Public Relations Executive, Public Relations Tel :603 2034 7161 Tel :603 2034 7228 Fax :603 2732 6158 Fax :603 2732 6158 E-mail :delyana@bursamalaysia.com E-mail :LiewShukYin@bursamalaysia.com