JP Morgan Takes Stake In DME

by Carla Johnson, Investors Offshore.com

15 October 2008

The Dubai Mercantile Exchange Limited (DME) has announced that JP Morgan has taken an equity stake in the Exchange, joining a number of other leading global financial institutions and energy trading firms which have also bought into the Dubai-based commodities bourse.

The DME’s Board of Directors approved the issuance of an equity stake of up to 20% to strategic investors, with core shareholders New York Mercantile Exchange, Inc. (NYMEX, whose parent, NYMEX Holdings Inc, was recently acquired by the CME Group), Tatweer, a member of Dubai Holding, and the Oman Investment Fund collectively holding a 75% equity stake in the exchange. The terms of the sale of this equity remain private and confidential.

Other firms making up the DME’s new shareholding structure include Goldman Sachs, Morgan Stanley, Vitol, Concord Energy, Casa Energy Trading, and a Shell Company.

The DME currently lists its flagship DME Oman Crude Oil Future Contract, the only physically delivered Middle East sour crude oil futures contract, which is increasingly seen as a global benchmark for the pricing of Middle East sour crude oil. In addition, the exchange recently launched its DME Brent Crude Oil Financial Contract and the DME Oman Crude Oil Financial Contract. To date, more than 400 million barrels of crude oil have been traded on the exchange, a figure that continues to grow in line with strong interest, demand and growing participation on the DME.

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