The Dubai Gold and Commodities Exchange, the largest and most diversified financial derivatives exchange in the Middle East, recorded remarkable trading activity during the first half of this year, with 3.5 million contracts worth $71.3 billion traded.
Lewis Himes, Commercial Director of the Dubai Gold and Commodities Exchange, said in an interview with Al Bayan, that the main drivers of this strong performance are the range of Indian rupee products that we provide, as they contributed to the majority of trading with 23 million contracts worth $57.6 billion.
Hemes stated that the Dubai Gold and Commodities Exchange, as the largest and most diversified financial derivatives exchange in the region, has succeeded in consolidating the emirate’s position as a global center for commodity trading. We have also succeeded in attracting investors from all over the world who use our platform for trading and hedging against risks. To date, the exchange has attracted 93 investors. , including 15 from outside the country.
He added that the strategic location of the Emirate of Dubai at the crossroads between the East and the West allows the stock exchange to play a decisive role in bridging the gap between the two time zones and allows investors to trade at ideal times when the markets in the East and West are closed.
The following is the text of the interview:
What is the total number of contracts and their value that were traded on the Dubai Gold and Commodities Exchange during the first half?
The stock exchange recorded remarkable activity, with 3.5 million contracts worth $71.3 billion traded. The main drivers of this strong performance were our range of Indian Rupee products, which contributed to the majority of trades with 23 million contracts worth $57.6 billion. Our six major currency futures contracts also contributed to the increase in trading activity, with 168,000 contracts traded worth $8.8 billion, followed by our gold futures contracts, with 76,000 contracts traded worth $4.8 billion.
The focus of our product portfolio in currencies and gold futures is in line with current global market dynamics, as investors look for effective hedging opportunities to reduce their exposure to potential risks amid increasing uncertainty in key markets.
In addition to the above, the growing importance of the Indian rupee product range also reflects the strength of trade relations between the UAE and India, which was strengthened by the recently signed Comprehensive Economic Partnership Agreement between the two countries, as bilateral trade between the UAE and India grew by 16% between April 2022 and last March to reach $84.5 billion. .
performance
What is your assessment of the stock market’s overall performance in the first half?
We are happy with the general level of trading activity and are working closely with our members to provide new features in the market and remove barriers that may hinder trading activity. One of our latest initiatives in this direction is waiving fees for some of our most widely traded contracts in the market.
Contracts
What is the share of gold futures contracts in the total contracts traded in terms of number and value?
Gold futures contracts played an important role in helping investors hedge against price fluctuations by providing them with a safe and regulated trading environment, especially in light of the high inflationary environment that the global economy is experiencing.
As a result, the gold futures contract constitutes a large portion of the gold contracts traded on the Dubai Gold and Commodities Exchange. During the first half of 2023, gold futures contracts witnessed the trading of 76 thousand contracts with a total value of $4.8 billion.
What is the position of the Dubai Gold and Commodities Exchange in the region and the world?
Dubai has long established itself as a major player in international trade, and the establishment of the Dubai Gold and Commodities Exchange was a natural development in the emirate’s journey to attract global investors to the region.
As a subsidiary of DMCC, our strategic focus is on enhancing commodity trade flows across the emirate by providing a comprehensive range of physical, market and financial infrastructure and services. Since our establishment in 2005, we have been committed to our message and the mission entrusted to us.
At present, the Dubai Gold and Commodities Exchange is distinguished by being the most comprehensive and diversified financial derivatives exchange in the Middle East, as our strategic location at the crossroads between East and West allows the exchange to play a decisive role in bridging the gap between the two time zones and allows investors to trade at ideal times when… Markets in the east and west are closed.
Since beginning our journey in 2005, we have developed a diverse range of products designed to meet the changing needs of our investors, including currency derivatives, such as a range of Indian Rupee products and futures contracts for the six major currencies, in addition to a range of futures contracts for metals such as gold, silver, copper and others.
Fee exemption
What is the total volume and value of Sharia-compliant spot gold contracts since their launch in 2018 until today? Will the offer of exemption from fees increase interest and demand for them?
Since its launch, the Shariah-compliant spot gold contract has received significant interest from investors seeking to invest in Shariah-compliant products for hedging and trading purposes.
As the first of its kind in our region, this product has achieved exceptional demand since its launch in 2018, as nearly 3,000 contracts were traded with a total value of $154 million. In the first half of this year, we witnessed the trading of 284 contracts with a total value of $17.4 million. dollar.
We believe that the exemption from fees and the significant global growth of the Islamic finance industry, which today is valued at $3 trillion and is expected to grow by about 10% between 2023 and 2024, will undoubtedly lead to increased interest in Sharia-compliant products and increased demand for a compliant spot gold contract. With Sharia law.
Coins
What currencies are most traded on the Dubai Gold and Commodities Exchange and why?
Our exchange offers a variety of currency products that have received great interest from investors, including futures contracts for the six major currencies, which provide a safe and regulated environment for investors to hedge against risks, which is especially important given the ever-changing global geopolitical and macroeconomic dynamics.
Our range of Indian Rupee futures has emerged as the most traded currency on the Dubai Gold and Commodities Exchange, and these products include Indian Rupee Futures, Quanto Futures and Mini Futures.
In the first half of this year, the Indian Rupee contracts group witnessed the trading of 3.2 billion contracts. This interest in our Indian Rupee products group is primarily driven by the large Indian community in the UAE, where there are more than 83 thousand Indian companies in the country, noting that it has been registered 11 thousand new companies in 2022 alone.
It is expected that the large Indian business community in the region will continue to contribute to increasing interest in Indian rupee futures contracts, as companies seek to hedge against the risks of currency price fluctuations in their dealings. In addition, as I mentioned previously, trade and investment relations between the two countries are growing, This enhances the attractiveness of our Indian Rupee futures products.
products
What are the most prominent products that the stock exchange seeks to add during the coming period?
The Dubai Gold and Commodities Exchange seeks to constantly improve and diversify its product range to meet the evolving needs of its members and traders. We are constantly working to introduce new contracts on the exchange and expand the metals asset class by including a silver contract that is compatible with the provisions of Islamic Sharia and which is currently subject to the approval of the Securities and Commodities Authority. This contract will provide investors with a reliable and transparent platform for trading silver, and we seek to repeat the success we achieved with the Sharia-compliant spot gold contract.
Investors
What is the percentage of external or international investors in the stock market?
As the largest and most diversified financial derivatives exchange in the region, the Dubai Gold and Commodities Exchange has succeeded in establishing the emirate’s position as a global center for commodity trading, and in light of the unique and diverse product range we provide, we have succeeded in attracting investors from all over the world who use our platform for trading and hedging against risks. We are proud that the stock exchange has attracted 93 investors, including 15 from outside the country.
2023-09-10 20:25:58
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