Overseas Alliances Key to Long-Term Growth

Building alliances with exchanges in Malaysia and other overseas markets is key to CME Group's longer-term growth strategy, chief executive officer Phupinder Gill told the Futures Industry Association.

"The best way for us to tap into new client bases and get into new product development is to make alliances with exchanges that have a need for one of two things—better distribution for their products and a first-class matching engine," Gill said in a recent interview with FIA president Walt Lukken. "We have been able to provide that to various exchanges around the world, and each of these exchanges brings something to the table for us too."

As an example, Gill cited an alliance with Bursa Malaysia, which, linked with CME’s Globex platform, led to a surge in palm oil futures trading. An investment in the Dubai Mercantile Exchange is another example, noting that move was driven by CME's Asia research staff, which identified a need for another crude oil benchmark.

The crude market for Asia clients is "growing massively and doesn't have a reliable benchmark" Gill said. "So the Asia research guys who were charged with coming up with... what we have called the East of Suez benchmark, said to us, why are we reinventing the wheel? DME trades exactly what these guys consume."

Click here for the full interview.

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