bye bye fascist london, hello freedom hong kong, and now even the gold will head to where it naturally belongs and so welcomed
scmp.com
HK's Fort Knox ready for business at airport
Enoch Yiu
Sep 03, 2009
Soon the coffee and the duty-free handbags will not be the only expensive buys at Hong Kong International Airport. The city's version of Fort Knox has opened at Chek Lap Kok and is preparing to receive Hong Kong's gold reserves.
The 340 square metre depositary has double security doors and bulletproof steel walls, according to a person who has visited the facility.
Hong Kong was a leading gold trading centre in the 1980s but had fallen behind New York, Tokyo and London in recent years, partly because it had no facility to store the precious metal. Its physical reserves of gold are kept in London, the biggest bullion market in the world. The Hong Kong Monetary Authority will ship them back from there before the year is out. It would not say yesterday how the gold would be moved.
Chim Pui-chung, who as legislator for financial services represents gold traders, estimated about half of the HKMA gold reserve was physical gold, with about 2,000 gold bars valued at about HK$250 million.
Financial Secretary John Tsang Chun-wah said the depositary, which opened yesterday, would help the government's efforts to enhance Hong Kong's role as a trading hub for gold.
Raymond Lai Wing-cheung, the Airport Authority's finance director, said it would lobby other central banks in the region to put their physical gold reserves in the depositary. He would not say whether the mainland would deposit some of its 1,054 tonnes of reserves in the city.
The mainland has the biggest gold reserves. They have grown by 76 per cent in the past five years. Last year, it produced 282 tonnes of gold.
Besides central banks, Lai said commodities exchanges, banks, precious metal refineries and issuers of exchange traded funds would be its clients. It was also in talks with Shanghai's gold exchange.
Value Partners (SEHK: 0806) chairman and chief executive Cheah Cheng Hye said the fund company planned to launch an exchange-traded gold fund and would use Hong Kong instead of London to keep the gold assets backing up the fund. "There is no cost advantage in using the Hong Kong depositary services but it is much more convenient than London," Cheah said.
Hong Kong Mercantile Exchange, which is seeking a licence from the Securities and Futures Commission to launch a gold contract in the fourth quarter of this year, yesterday signed an agreement for all its members to use the depositary for gold storage and settlement of physical gold contracts.
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