The Middle East's leading derivatives exchange, the Dubai Gold and Commodities Exchange (DGCX), boasted record-breaking end-of-year results on December 6 after statistics showed that the exchange had grown by 26% year-on-year.
Over the period of a year the exchange traded 1.14m contracts, valued at USD57.5bn. Average daily volume touched just over 4,500 contracts in 2008, an increase of 28% compared with 2007. Since inception in November 2005, over 2.6 million contracts have been traded with a value in excess of USD107bn.
The DGCX revealed that growth in precious metals, currencies and energy and diversification of its portfolio by introducing innovative products was key to the record-breaking results. Last year, DGCX took steps not only to expand its portfolio, but also to review existing contracts as per the requirements of members.
At the DGCX Annual General Meeting, held in Dubai last month, Ahmed bin Sulayem, Chairman of the DGCX, outlined the exchange's objectives and growth plans to expand the exchange further in 2009. He also emphasised that the core strength of DGCX lies in its understanding of customers' needs and its positioning as the exchange offering “the right products, in the right place and at the right time”.
In May, the launch of West Texas Intermediate and Brent crude oil futures surpassed all previous DGCX product opening day volumes. In the month following the launch of crude oil futures, 36,500 contracts (USD4.9bn) were transacted, making the crude oil launch the most successful ever for DGCX.
In October, the Indian Rupee futures contract - the world's first – was strengthened to reflect market developments and customer requests. The contract, which is now cash settled in US Dollars, remains the only Indian Rupee futures contract accessible to international market participants.
July 2008 was the best month at the DGCX since the exchange opened for trading in 2005, with 187,000 contracts (worth USD12bn) and a new daily record of over 14,000 contracts. The increase in activity during the year was led by trading in futures on crude oil, currencies and precious metals.
Malcolm Wall Morris, Chief Executive Officer at the DGCX, noted that volatile global markets and the tightening of credit have clearly altered the economic framework in which DGCX operates.
“However, at the same time, the economic crisis has demonstrated the importance of transacting derivatives business via an exchange and clearing house in order to reduce counterparty credit risk. DGCX is uniquely positioned to meet this requirement by operating the Middle East’s sole clearing house”, he concluded.
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