CME Group Inc. CME has inked a deal with China Foreign Exchange Trade Systems (“CFETS”) to create new opportunities and mutually promote products and market infrastructure.
The agreement complements one of the outcomes of the 7th U.S.-China Strategic Economic Dialogue – enhancing bilateral cooperation and constructively managing differences, so as to strengthen the relation between China and the U.S. through close communication via high-level exchanges. Per the deal, CME Group and CFETS will jointly work on the innovation and development of offshore RMB products. The companies will also be engaged in enhancing product distribution connectivity, thereby allowing CME Group customers to trade China interbank products. At the same time, CFETS will allow China interbank market participants to trade CME Group’s products.
China is a key market for CME Group’s product distribution. The latest agreement, therefore, bodes well for the company’s growth with enhanced opportunities. Also, the partnership is expected to strengthen the respective markets of both the companies with greater quality of products and services.
Moreover, the collaboration between CME Group and CFETS will mutually benefit both the American and Chinese financial sectors. This will be achieved by promoting connectivity, meeting the requirements of market customers for hedging against the risk of foreign exchange rate and interest along with progressing bilateral trade, which will lead to economic development.
A few days back CME Group had forayed into the Chinese market via its partnership with China Securities Index Co. Ltd. (“CSI”) for index development and product licensing. Per the agreement, CME Group will issue CSI a license to use some of its data for calculating, developing and disseminating commodity indexes. The latest deal further strengthens the company’s foothold in the country.
Zacks Rank and Other Stocks to Consider
CME Group presently carries a Zacks Rank #2 (Buy). Some other players from the finance sector that warrant a look are American Capital, Ltd. ACAS, NewStar Financial Inc. NEWS, and CBOE Holdings, Inc. CBOE. While American Capital and NewStar Financial both sport a Zacks Rank #1 (Strong Buy), CBOE Holdings holds the same Zacks Rank as CME Group.
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