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Singapore Exchange to launch OTC container swap contracts

Singapore: Singapore Exchange (SGX) is jumping on the container freight derivatives bandwagon with over-the-counter (OTC) container swap contracts. The new OTC contracts will be launched on August 2. The contracts will cover four routes from Shangai: Shanghai-Europe, Shanghai-Mediterranean, Shanghai-US West Coast and Shanghai-US East Coast. The contracts are based on the Shanghai Containerized Freight Index (SCFI) published by the Shanghai Shipping Exchange. "The launch of these contracts will support the nascent container freight derivatives market by managing counterparty credit risk," SGX said. "Participants are able to gain access to SGX AsiaClear's large pool of counterparties without the need to set up credit agreement with individual counterparty." [23/07/10]

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