Sharechat Logo

NZX plays down complaint over dairy futures

Wednesday 15th September 2010

Text too small?

NZX, which is launching dairy futures trading next month, has played down the significance of a complaint that Fonterra will be able to influence derivative prices.

The bourse operator will use Fonterra’s globalDairyTrade milk powder price  as the reference price for its futures contracts. That was the best option for a reference price on its dairy futures market because of the exporter’s transparency and international integrity.  

“Despite the fact that settling a price to an Agrifax index would materially grow the value of the NZX – NZX decided that it would settle to gDT as it better represented actual prices paid for whole milk powder, and was the best reference price for the entire dairy industry, not just Fonterra,” NZX said.

“The benchmark for dairy pricing is going to be a matter of regular public record, and having the scrutiny of a global external market, and its regulators, will afford increasing transparency over the reference price – gDT – and its formation,” it said.

The integrity of the system was questioned when Open Country Dairy, the target of the Talley’s family’s Affco takeover bid, laid a complaint with the Securities Commission over the use of Fonterra’s online trading platform as a reference price.

The stock exchange will launch whole milk futures on October 8 and will introduce new futures and options products in the coming months. The futures contract will be traded on the NZX platform and settled by cash, and will be cleared through the new clearing house operated by New Zealand Clearing.

The Securities Commission last week authorised NZX to operate a derivatives market and launch new products.

NZX shares climbed 4.5% to $1.62 in trading today.

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls, NZX suspends trading after 6.2 magnitude Wellington earthquake
Cash trading on New Zealand stock exchange surges in first half, driven by equities
NZX cash trading tops $5 bln as MightyRiverPower listing beefs up market
NZX cash trading value jumps by 58 percent in February from a year earlier
NZX looks to launch spot gas market in June
NZX full-year profit falls 32 percent
NZX boss Bennett rounds out 2012 filings with $1.87M share acquisition
Equity trading jumps in NZX cash market as NZX 50 nears 5-year high
NZX names Amelia Wong as head of cash markets
NZX rings more changes as PR chief Macrae exits