Dubai exchange to focus on EM currencies

July 31, 2014 5:49 pm

Exclusive: Following the launch of Indian Rupee futures trading, the Dubai Gold Commodities Exchange will continue its Emerging Markets product strategy, DGCX chief executive Gary Anderson tells AMEInfo

As we understand, DGCX is hoping to expand its products in Russian Rouble, South African Rand and Korean Won. Why have you chosen to tap into these emerging currencies?

These currency products form part of our strategy to widen our emerging market (EM) currency portfolio. We believe these provide an exciting trading option for Middle East investors seeking to manage risk or take exposure on some of the world’s largest emerging markets. All of these EM currency products are set for launch in third quarter of 2014

Do you feel the GCC investors are developing an appetite for EM currencies?

Building from the strength of our Indian Rupee contract and as part of our Emerging Market product strategy, our aim is to expand access for regional market participants to the world’s emerging currencies, and provide them a chance to hedge their exposure to markets that are increasingly relevant within global business flows.

Globally there is a growing demand for these currencies and we certainly believe that holds true for GCC based participants.

What other products do you hope to introduce at DGCX – across all sectors? 

On top of the list is DGCX Spot Gold contract, the Middle East’s first exchange-traded, regulated, physically deliverable spot gold contract. The product will enable market players to trade Dubai spot gold on a secure and regulated exchange platform and to take or make delivery of gold two days after trading at three separate locations in Dubai.

The exchange has advanced plans to list other gold products, designed to support and complement the current futures contract and the spot contract when it is listed.

In the currencies sector we have plans to launch some mini Indian rupee contracts, again designed to complement the main USD:INR contract whilst providing further opportunities to our growing membership base.

We have a licence to list a futures contract on the MSCI Indian fund. We are in the process of finalising product specification and are intending to launch within the next three to four months.

We have also been looking at opportunities to launch futures contracts on agricultural products for some time. The exchange is currently studying the potential of a physically deliverable black pepper futures contract, along with other agricultural commodities.

A recent survey claimed that about 41 per cent of UAE businesses are likely to base future trade on the Chinese currency – Renminbi. What do you make of this?

The UAE businesses are increasingly becoming more aware of how trading in the currency can help them build stronger relationships, manage risk as well as benefit them in terms of pricing. We are expecting the RMB to become more widely used amongst UAE businesses in the medium to long term.