「亜太黄金半世紀」The Evolution of Asia-Pacific Bullion Market in the Past Five Decadesと銘打ったこのイベントは「香港貴金属同業協会有限公司」Hong Kong Precious Metals Traders Association Limitedという団体が主催したものです。この団体はそもそも香港地場の歴史あるゴールドのマーケットであるThe Chinese Gold & Silver Exchange Society（CGSE）のフロアトレーダーたちが作った協会です。香港でゴールド取引に従事する取引所とそのメンバーそしてそこで取引してきたトレーダーたちの団体と言えばよいでしょう。今回のイベントは、まさにそのタイトル通り、過去50年間でアジアのゴールドマーケットがどのように発展してきたのかを振り返る非常にユニークなものでした。プログラムは次の通り。
基本的にすべて広東語で、英語でのスピーチは僕とMr. Henry Yapだけでした。Henryは元Johnson Matthey HKのヘッドで日本でも古い業界人は知っている人間が多い有名人です。彼はもともとMalaysiaの華僑で広東語も使えますが、ちゃんとしたスピーチでは英語の方が楽であるとのことでした。純粋に中国系でなく、しかも広東語を理解できないのは僕だけでした。僕やHenryのスピーチは、前もって送っていた英語の原稿を広東語に訳した字幕をモニターに流すというやり方でした。ということで残念ながらHenry以外のスピーチは僕にとっては全く理解できないものでした。笑。
さて、僕のスピーチですが、「Tokyo’s gold market – its past, present & future」というタイトルで、東京のゴールドマーケットの過去30年と現在そして未来について話ました。たった15分ですが。笑。
Tokyo Gold Market, past, present and future.
Good afternoon ladies and gentlemen, distinguished guests; I am very much honored to have this chance to speak to you here today. I thank my old time good friend Mr.Anderson Cheung known as Sangor who must have indicated my name to the conference committee. Thank you sangor. I see many faces that I have known for easily more than a quarter of the century. For me and also for those of you who knows me, this event itself represents the past history of the gold market in Asia. I have traded with a lot of you here today and I keep the fond memory of the market still.
Today I will have a short speech – just 10minutes or so about Tokyo gold market which I got involved from about 30 years ago. Of course it is impossible to talk about the 30 years in 10minutes so my speech will be a very summary of Tokyo gold market in the past and possibly a view for the future.
I have started my career as a precious metals trader in Sumitomo Corporation in 1986 about 30 years ago. When it was still only a couple of years since Loco London market in Asia evolved here from Hong Kong. Sumitomo was the first Japanese trading house to join in making market in Loco London gold price in 1983. In several years’ time other Japanese trading houses like Marubeni, Mitsui and Mitsubishi followed Sumitomo’s path and became market makers. At the same time around we established Loco Tokyo Gold spot market, in which about 15 firms who engaged in gold business, have joined and made market to each other in spot gold in yen per gram basis for 50kg gold for a quote. So there were 2 spot dealing markets in Japan. One is Loco London market which is rather international – Sydney, Tokyo, Hong Kong and Singapore were the main locations where Loco London market makers based. While Loco Tokyo market was rather a local market but Trading houses are quite active trading Loco London against Loco Tokyo. Loco Tokyo market is a pure physical kilo bars market, 50kg per quote and physical gold was delivered every time the trade was done. It was quite active dealing market. Every participants company had a trading desk and they quote to each other from 9am till 3:30pm every business day. Loco London market and Loco Tokyo market were 2 of the 3 major trading markets in Tokyo in addition to Tokyo Commodity Exchange. Unfortunately, Loco Tokyo Gold market became extinct after the Asian economic crisis in1997. Since Loco Tokyo Gold market was an OTC trade and there used to be limitless credit lines among the Loco Tokyo participants companies. But at the shockwave of the Asian Crisis, the credit lines became tighter and even among the Japanese companies, lots of lines were cut and there were no more trading possible, thus the market making would not work anymore since you have no more counterparties left to trade. For example, I was at Mitsui those days and of all the Loco Tokyo counterparties, I could only trade with Sumitomo and Mitsubishi, the two big trading houses. Since then Loco Tokyo dealing market ceased to exist and it has never come back again.
Tokyo Commodity Exchange – TOCOM
In a sense Loco Tokyo OTC market was a supplement to Loco London gold market and Tocom. That is another reason that Loco Tokyo market ceased to exist. Now let’s look at Tokyo Commodity Exchange, known as Tocom, as this market is surely the center of the Tokyo market and it had a biggest influence over the Asian gold market in the past.
Tocom started gold contract in March 1982. Sumitomo Corporation was the first trading house which started both Tocom trading and market making in Loco London market in Tokyo. It was 1983 May for silver and September for gold when they start Loco London market making. I started trading in Sumitomo in 1986 and other trading houses followed Sumitomo in either 1986 or 1987 in market making. Tokyo became one of the major trading places after HK in Asia Loco London market. I still remember my first business trip to Hong Kong in 1987. I met several people here for the first time – so it is now almost 30 years since I met you. It is anything but incredible that we are still in the gold market in some way or another.
Tocom changed its trading system to computer matching engine in 1992 – until then it was a fixing style trading – we had 6 fixings every day through floor traders. But since the new trading system was introduced, it became an open outcry continuous trading from 9 am to 3:30pm. The graph below is the trading volume since Tocom’s computerization in 1992 till 2014. This volume can tell the heyday of Tocom was 2003. That was actually before the gold price shook up – rather market was quiet but every trading house- 9 of them – traded huge volume in Tocom. It was rather a money game than a real trade. Everyday Tocom gold traded about 100 tons of gold in 2003.
(Tocom Precious Metals contract trading volume)
And more recently Tocom gold trades roughly 10million contracts per year which translates about 40tons per day.
The volume has decreased to half of the most active year. There were big changes in the market as a whole which I know all of you are well aware. The main drivers of the market were traders back in old days. We may hit each other but we provide liquidities to the market, holding positions – either you are long or short. But this past several years, the market has become a different animal – argos and high frequency trading had made market place totally different from what we used to play in. In Tocom as well now main players in the market is computers programmed trades. That is probably the trend of the time but I feel a little sad as I see traders are losing jobs to computers. In Japan many of the trading houses actually pulled out from trading Tocom. The percentage of the foreign participation to Tocom now is almost 50% and most of them I suppose are argo traders.
I may have sounded a little negative to the change of the market, but if you still keep participating in Tocom, there is still a good old arbitrage chance, for my point of view, as the other trading houses pulled out from the market, the chances are bigger now. So I would like to recommend you to consider trading Tocom from Hong Kong. As you can see the participation from the overseas are almost 50%, this means Tocom is now more overseas friendly market. Tocom is changing itself easier to access from overseas. Now it is looking at ways to make it easier to make or take deliveries for overseas participants.
This year May Tocom has started a new contract called Tokyo Gold Spot 100. This contract is a spot and deferred contract for 100g gold and investors can hold the positions as long as they wish. This has become a brilliant success – trading about 20,000 lots per day and open interest is closer to 70,000 contracts.
Tocom might be considering an even new physical contract as well. With Tocom’s aggressive initiative, I am hoping that Tokyo market will get its leading status in the gold market again. Even if it is difficult, with the big market in China, I think Asian market – Hong Kong, Singapore and Tokyo together has a good potential to be the center of the world gold market. Let’s corporate and make the market better place together as we had done already 25 years ago.