DGCX caps seventh anniversary with new volumes milestones
- United Arab Emirates: Wednesday, November 28 - 2012 at 13:26
- PRESS RELEASE
Dubai Gold and Commodities Exchange (DGCX) capped its seventh anniversary this month with a series of volumes milestones that reinforced its rising international profile.
In its seventh year, DGCX embarked on a portfolio expansion strategy to widen its global market and launched significant initiatives to expand liquidity and depth in its existing contracts. It also rolled out a plan to deploy an industry-leading trading platform to support the growing sophistication of trading needs and initiated educational campaigns to extend the benefits of derivatives trading to a wider audience in the region. Global Banking & Finance Review named DGCX the world's 'Best Global Commodities Exchange' in July in recognition of its trade volume growth and product innovation.
Gary Anderson, CEO of DGCX, said, "DGCX's international profile has taken a leap this year with many of its products emerging as important hedging and price-reference tools for business communities across the world. These products have allowed us to strategically position DGCX as an important growth partner for global trading hubs."
Among key products driving the Exchange's international profile is the Indian Rupee Futures Contract, which is increasingly appealing to institutions that consume Indian Rupee liquidity.
"The product has been attracting growing attention from both retail and international institutional participants, ranging from multinational banks, non-deliverable forward (NDF) markets, traders and other business entities," said Anderson.
Increased back-month trading in the contract has expanded opportunities to both manage price volatility and profit from price movements in the Indian Rupee. DGCX currently contributes about 30% of the global total exchange-traded value of Indian Rupee Futures contracts. The product was recently awarded the prestigious 'Contract of the Year 2012' award by FOW magazine. Year-to-date volumes in the contract reached a record 7.5 million trades valued at $280bn as of 22 November 2012.
With an increasing number of gold wholesalers in Dubai hedging their exposures on DGCX, the Exchange's Gold Futures has also attracted greater interest from global traders. The contract has become particularly valuable to gold markets in Asian hubs like Singapore, which have substantial gold trading links with Dubai.
Trading in DGCX Gold Futures was enhanced by recent contract changes to further boost liquidity and facilitate tighter spreads. In particular, the introduction of a 'matching intent' facility that allows both physical and cash settlement of trades made the product more attractive to retail and institutional traders.
"These changes are part of our constant endeavour to improve our contracts based on feedback from our member community and the market," said the DGCX CEO. Year-to-date volumes in DGCX Gold futures reached 4 million trades valued at $132bn since inception.
The Exchange's new Copper Futures led its portfolio expansion push in 2012. Designed to be one of the most liquid metal contracts in the world, DGCX Copper Futures has already emerged as the third-most actively traded copper contract in Asia. The first Copper contract introduced in the Middle East, the product was launched following detailed consultation with Exchange members and the recently constituted DGCX Copper Advisory Group, an informal body of copper market players.
In the year ahead, building on the performance of the Indian Rupee Futures, DGCX is seeking to develop a strong offshore platform for the trading of a range of Emerging Market contracts.
"Increased investments and enhanced trade with emerging markets have created the need for instruments to manage currency risk. We are engaging with both regional and international markets to explore the introduction of a range of Emerging Market currency and Index based futures in the coming year. This is an important strategic focus for DGCX," said Anderson.
In 2012, the Exchange also enhanced its focus on developing the regional derivatives market. Leading this effort is the DGCX Academy, an initiative that seeks to extend the benefits of derivatives trading to a larger audience in the region.
"We believe vast sections of the regional trading community can raise their business profitability and better manage risk from market volatility using our derivatives products. DGCX seeks to play a significant role in developing the nascent derivatives marketplace and the industry value network in the MENA region," said Anderson.
DGCX Academy seeks to drive awareness, education and certification amongst the UAE's trading community and assist them in trading and managing risk more effectively. Apart from established traders, it also provides beginner traders the educational support necessary to make informed decisions on trading strategy and markets.
In 2012, DGCX also partnered with Cinnober, one of the world's leading trading technology providers, to develop a new trading platform, a move that will allow the Exchange to significantly enhance its derivatives trading marketplace. Cinnober's latest technology will provide DGCX's growing Member community superior transaction speeds, efficient means to access liquidity, and increased reliability and scalability.
"Over the last seven years, DGCX has continued to play a vital role in strengthening the UAE's financial system by providing investment and hedging tools that allow market players to increase business profitability and manage risk within a well-regulated environment," said Anderson.
"We have ambitious growth plans in the coming years to reach out to a larger global market, and are confident that our new initiatives will further enhance our role in the region and our profile in the international derivatives trading map," he added.
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