The Industrial Bank successfully launched deferred-delivery silver products as an agent of the Shanghai Gold Exchange on August 3, 2009, becoming the domestic commercial bank with the most comprehensive range of trading items as an agent of the Shanghai Gold Exchange.
Contracts on the deferred-delivery silver products are listed on the Shanghai Gold Exchange for trading. The trading, starting from one kilogram, is made with a two-way deposit. A customer who opens a position during the day may choose to close his or her position on the same day or on a later date. It's reported that the Industrial Bank has optimized and upgraded its precious metal trading platform for the launch of this new service. Investors who have opened an account at any of the Industrial Bank's outlets nationwide can trade via its online bank or at a bank counter.
According to the Industrial Bank official in charge of the services, in recent years, the international precious metal market has rapidly expanded and prices remain high. Domestic investors are showing a stronger interest in precious metal products such as gold and silver; however, investment conduits suitable for domestic customers are extremely limited. In response to this situation, the Industrial Bank, a bank member of the Shanghai Gold Exchange with full agent qualifications, has embarked on proactive innovation of its products and launched the deferred-delivery products as an agent of the Shanghai Gold Exchange. It's the first domestic commercial bank to provide comprehensive trading services for gold, platinum and silver products as an agent of the Shanghai Gold Exchange.
The Industrial Bank official warns investors that although the leverage multiplying function of the deferred-delivery silver products of the Shanghai Gold Exchange may yield high investment returns, it's equally likely to lead to substantial losses, which may exceed all of the investor's initial and additional deposits. He cautions investors to seriously review their capacity to withstand risks and obtain a full understanding of the products' characteristics and risks before plunging in the investment of deferred-delivery silver products. He also urges investors to exercise extreme caution with the investment.
Media reports indicate that the Industrial Bank is also China 's first commercial bank to launch the individual physical gold products and individual deferred-delivery gold products (Au T+D) of the Shanghai Gold Exchange. The deferred-delivery silver products (Ag T+D) of the Shanghai Gold Exchange, launched by the Industrial Bank for individual customers, will not only help expand investment conduits for domestic investors, meet the growing market demand, and promote the growth of the domestic precious metal market, but also help the Industrial Bank switch to a new profitability model from its traditional operating model which relies heavily on deposit and loan business; moreover, they will further consolidate the Industrial Bank's “early-mover” advantages as an agent in the precious metal market and allow the bank to obtain steady intermediary business earnings, thereby enabling the bank to better cope with competition within the financial industry.
To attract more investors to trade in precious metals via its platform, the Industrial Bank offers an incentive: all individual customers who open an account at the bank for the Shanghai Gold Exchange in 2009 will be exempted from the accounting opening fees.