Euronext (ENX) has signed a license agreement with the Johannesburg Stock Exchange (JSE) providing the JSE with the right to list the flagship Milling Wheat contract currently traded on Euronext.
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The aim of the agreement is to extend access to the global benchmark Milling Wheat contract by broadening its international exposure to a wider audience.
In this context, through partnering with the largest exchange in the region, the agreement also extends Euronext's reach into Africa, which according to International Monetary Fund forecasts, will be the world's second fastest-growing region next year, expanding 5.75 per cent.
The license agreement signed between the two exchanges is reciprocal, enabling each exchange the right to use the settlement prices and brands for the other's commodities contracts. JSE will initially list the Euronext Milling Wheat contract, and this agreement can be extended to include its contracts for Rapeseed and Corn.
Nicholas Kennedy, head of Commodities Business Development at Euronext, said, "Euronext is delighted to be able to offer its global benchmark wheat contract to the Johannesburg Stock Exchange under its own branding. This agreement fits within our larger strategy of broadening our reach in a selective manner with targeted partners.
"In this particular case, it further strengthens our high quality franchise through greater visibility while providing JSE with the opportunity to offer a broader range of products to its clients looking to hedge their volatility in the wheat agricultural area."
Chris Sturgess, director of Commodities & Key Client Management at the JSE, said, "The JSE is pleased to make available to its clients Euronext's benchmark Milling Wheat contract. This will give local market participants easy access to the European wheat market, adding a wider choice of trading opportunities where participants already access South African and North American wheat markets.
"The South African exchange looks forward to the growth of the strategic relationship with Euronext through which we are jointly able to offer a wider range of products across our client base." ■