Airport Authority Hong Kong (AAHK) Wednesday announced that it will open a precious metals depository at Hong Kong International Airport (HKIA) by the end of 2007.
The move is aimed at enhancing Hong Kong's role as a financial and logistics center and meeting growing regional demand for gold, said the authority in a statement, adding that it will proceed to establish the new facility upon Hong Kong's Legislative Council's approval of a proposed waiver of trade declaration charges for gold.
Also on Wednesday, the government of the Hong Kong Special Administrative Region (HKSAR) proposed the introduction of the Import and Export (Registration) (Amendment) Regulation 2007 to exempt the trade declaration charge on imports, exports and re-exports of gold bars of 995.0 fineness or above.
According to AAHK, the precious metals depository will provide a central, secure storage facility for traders, institutional investors, gold producers and refineries, and serve as a physical settlement platform for trades made on the Chinese Gold and Silver Exchange Society and other Asian markets.
The depository will also minimize risk, and reduce settlement time, transportation and insurance costs for the industry.
Commenting on the new facility, AAHK Chairman Victor Fung said that HKIA is a hub for global flows of people, capital, goods and information, and that the depository complements this role and will allow Hong Kong to act as a bridge between global gold producers and markets on the Chinese Mainland.
"The new facility will also stimulate capital flows and provide a platform for the creation of innovative, gold-based investment products and services." Fung said, noting that the HKSAR government's plan to waive declaration charges is the key to establishing the territory as a leading center of precious metals trading.
The depository will initially be a wholly owned subsidiary of the AAHK, with the long-term objective of divesting to major users of the depository.
Revenues will be generated through rentals of secure storage space in the depository, which will have a total area of up to 300 square meters. A tender for the design and construction of the facility will be announced shortly.
HKIA is well suited to the establishment of a precious metals depository. The airport has state-of-the-art security, handles a wide range of high-value cargo and serves 150 destinations worldwide, including 40 Mainland cities.
"HKIA's proximity to the Mainland, where demand for gold is expanding rapidly, is also a plus," said the statement.
(Xinhua News Agency January 18, 2007)