Financial Market Operations
Financial market operation is a kind of operation mode adopted by the Company to improve income, reduce cost or mitigate risks by utilizing financial features of the oil industry and actively participating in all kinds of skillful operations or operation combinations in financial markets (including trading finance, financial investment, and use of financial derivative instruments), which combines industry with finance to a new business.
ZhenHua Oil started its financial market operations based on its comprehensive risk control practices for international business. After years of accumulation of experiences and growth, an independent financial trading sector and a professional platform for inquiry, quotation and transaction have been set up. With a professional and experienced team as the backbone, it is now mature and has become the core competence of the Company.
ZhenHua Oil has established a close relationship with 53 financial institutions at home and abroad, including EIBC, CDB, BOC, ABC, ICBC, CCB, BOCOM, and SCB, Banque de I'IndoChine, DBS, CITI among others. The accumulated credit limit is over USD 20 billion. The Company markets foreign exchange, interest rate derivatives and other financial derivatives through multiple platforms worldwide in the amount of over USD 10 billion in 2014, which will keep on increasing with the growth of business.
In terms of the financial market operation, the Company gives full play to the financial features of the crude oil as a commodity, utilizes the pricing difference of capital elements in different markets and, in compliance with laws and regulations, the geared operations play at domestic and overseas platforms. Thus, the overall exchange risks get effectively controlled and the capital risks of commodity get mitigated. The cross-border transactions, which amount to tens of billions of US dollars each year, are settled safely and on time. The financial capital operation has gained extra income for the Company.