On July 4-5, Mercantile Exchange of Vietnam (MXV) successfully conducted a training session titled "Commodity Portfolio Risk Management" in Hanoi and Ho Chi Minh City. The event saw the participation of over 300 guests, including Members and Brokers representatives from the commodity trading market in Vietnam.

The training session is an event in a series of specialized training programs of MXV, enhancing the understanding of risk management among members and brokers, ultimately elevating the quality of human resources within the market.

The speakers for this session were experts from Synergy Link Capital - Inspirate Trading Solutions Pte Ltd (ITS) based in Singapore, a renowned professional entity in the financial sector. ITS specializes in offering commodity trading solutions, price indexes, and foreign exchange services. Additionally, they collaborate with leading commodity exchanges worldwide to conduct seminars and provide comprehensive training on trading and risk management. Currently, ITS serves as the primary information provider for the market report section of the CME Group.

The training session

Risk management is a key factor for effective trading

In the first half of 2024, the global raw material market experienced significant fluctuations. In particular, the prices of many commodities reach new peaks.

Between March and May, Copper prices increased by 35% to 11,200 USD/ton, the highest level in history. Silver prices also rose by over 40% to an 11-year peak, while platinum prices reached a 2-year high. By mid-April, Cocoa prices had soared by more than 170% since the beginning of the year, hitting a historical high. Despite a slight correction following the rapid increase, cocoa prices remain high at 7,729 USD/ton, up by more than 80% compared to the start of the year. Other products also saw remarkable price hikes.

Mr. Andy Tan, CEO of ITS said: "Given the current volatile global economy, the commodity trading market presents new investment opportunities along with risks. The potential risks arise from the continuous and significant fluctuations in commodity prices. The Vietnamese market holds great potential for growth, but risk management is now more crucial than ever."

Mr. Andy Tan, CEO of Synergy Link Capital - Inspirante Trading Solutions Pte Ltd (ITS)

Risk management experience from the world's leading experts

MXV has coordinated with ITS to develop a risk management training program specifically for the Vietnamese market. The program includes 5 main contents: (i) Introduction to Commodity Portfolio Risk Management; (ii) Market Dynamics and Product Focus; (iii) Risk Management Fundamentals; (iv) Hedging and Speculative Strategies; (v) Case Studies and Risk Mitigation Best Practices.

During the training session, experts provided a thorough explanation to members and brokers about various common risks associated with trading. These risks were illustrated with examples, such as liquidity risk, basis risk, fundamental risk, geopolitical risk, currency risk, and price risk...

At the same time, experts also shared techniques for evaluating and measuring commodity portfolio risks, as well as risk management tactics for trading each specific commodity that have proven successful in global markets throughout different historical periods. This knowledge transfer enables members and brokers to effectively implement these strategies in the context of commodity trading in Vietnam.

Mr. Pham Thanh Trung, Deputy General Director of Ho Chi Minh Commodity Trading Corporation, a member of MXV, emphasized the importance of risk management when establishing a business in the financial sector, particularly in commodity trading. He highlighted the significance of prioritizing risk management and expressed gratitude for the training session, which provides valuable insights for the company, market participants, and brokers to enhance their professional skills and better serve customers engaged in market transactions.

Mr. Pham Thanh Trung, Deputy General Director of Ho Chi Minh Commodity Trading Corporation

Mr. Vu Minh Tam, Broker of Hitech Finance Joint Stock Company, expressed his admiration for the experts' sharing methods. He found the content concise and practical, with numerous examples that helped him gain diverse perspectives and improve his skills and knowledge in risk management. This has enabled him to engage in discussions about advanced risk assessment, measurement, and mitigation methods on a global scale.

Tra My