DUBAI // Dubai's Gold and Commodities Exchange (DGCX) has already surpassed its trading volume for last year, as the exchange yesterday reported a 54 per cent increase in volume in the year to date to US$48 billion (Dh176.3bn). The region's first derivatives and commodities exchange reported more than 106,000 contracts were traded in August, bringing total contracts traded this year to more than 930,000.
DGCX officials said the addition of two crude oil contracts in May was a major factor in the growth. The listings - for Nymex West Texas Intermediate, the benchmark crude for the US, and ICE Brent crude, the standard used in Europe and much of the rest of the world - allow regional funds to invest in oil futures without taking money out of the region. "Volumes on DGCX have gathered momentum in 2008 due to our diversified product offering and more market participants adopting derivative products in their portfolios," said Malcolm Wall Morris, the chief executive of the DGCX.
"DGCX crude oil contracts, launched just three months ago, account for 10 per cent of year-to-date volume." Oil prices plunged by almost 10 per cent on Tuesday, hitting a five-month low near $100 a barrel, with precious metals and grains on its heels. However, Mr Morris said the current price volatility had not reflected negatively on Dubai's contracts trade. "Commodity derivatives are fast gaining favour among market participants seeking asset diversification," he said. "Higher volatility in the commodity markets has also created new interest in derivatives."
Year-to-date volume for gold futures has increased 34 per cent, while gold options were up 272 per cent. The price of gold averaged $910 an ounce in the first half of the year, according to the Dubai Multi Commodities Centre, which operates the DGCX. Volumes for euro futures increased 241 per cent, reaching 90,000 contracts during the period. DGCX said last week that it would launch the Middle East's first plastics futures contracts later this year. A total of 12 plastics contracts will be traded on the exchange, covering four products - one polypropylene and three polythene grades - in the Middle East, North East Asia and South East Asia.
vsalama@thenational.ae