Chinese-backed Asia Pacific Exchange (Apex) said it will start trading in Singapore on May 25, the latest foray into overseas trading venues by mainland investors.
Apex will offer palm olein futures that will be dollar-denominated and physically delivered, it said in a statement on Thursday.
The bourse will be the third derivatives exchange in the city state, joining venues owned by the Singapore Exchange and Intercontinental Exchange.
China has seen several outbound investments in trading venues as part of its efforts to integrate into the global financial system, with deals for stakes in markets in Bangladesh and Pakistan, and a joint venture with Deutsche Boerse in Frankfurt.
While those efforts have the backing of one or more mainland exchange, Apex is privately funded and led by industry veteran Eugene Zhu, its founder and chief executive officer. He previously ran the Dalian Commodity Exchange and the China Financial Futures Exchange.
"As global trading in commodities and financial instruments gravitates towards the region, I am optimistic that our first listed palm olein physically deliverable futures contract denominated in dollars will meet the demands in the current market and has the potential to become the Asian pricing benchmark for palm oil," Mr Zhu said in the statement. He is himself a major investor in Apex, which has more than 60 employees.
A unit of CEFC China Energy, the troubled energy giant, holds a 20 per cent stake in Apex, according to corporate filings.
Hong Kong Xinhu Investment and Shanghai Chaos Investment also have stakes.
Mrs Lim Hwee Hua, a KKR senior adviser who was Singapore's first female minister, is Apex's chairman.
The company is studying products including natural rubber, South American soya bean, iron ore, crude oil and financial futures, Mr Zhu said in an interview earlier this year.
Palm oil is the world's most widely consumed vegetable oil, found in goods such as ice cream, instant noodles and lipstick.
Indonesia and Malaysia are the world's top producers of the agricultural commodity, and futures on crude palm oil are most actively traded at Bursa Malaysia Derivatives.
There are no major futures derivatives on refined palm oil.
BLOOMBERG
