Dubai, UAE, January 03, 2017: Dubai Gold and Commodities Exchange (DGCX), the region’s largest and most diversified derivatives bourse, closed the year on a high note, recording growth of 36% over 2015. In 2016, the Exchange reached its highest annual volume traded with an aggregate of 19.7 Million contracts, valued at US $ 439.5 Billion.
2016 saw substantial global volatility triggered by a series of notable events; Brexit- leading to increased volumes in the Euro and British Pound, up 8% and 167% respectively, Indian currency demonetization along with the US election results and the recent US Fed rate hikes – all of which had an impact on markets and volumes, culminating in the DGCX marking its highest Open Interest (OI) of 665,058 valued at US $ 9.7 Billion. This increased trading activity in the face of volatile economic situations demonstrates the value of DGCX’s diverse product range and its use by regional and international traders to hedge and mitigate their risk exposure.
Trading an average of 76,835 contracts per day in 2016, DGCX also achieved its highest Average Daily Volumes (ADV) in its eleven years of operation.
DGCX’s currency segment was the outstanding performer in 2016, growing 34% from last year. The Indian Rupee products led the growth within currency segment, recording a substantial increase of 34% from last year. The Indian Rupee Options contract traded it’s highest volume with 334,823 contracts whilst the average daily OI touched 8,963 contracts. Other currency pairs witnessed significant year-to-date growth with G6 futures chronicling a rise of 57%.
The DGCX gold basket registered growth of 61% in 2016. DGCX’s gold products all performed strongly - Gold futures (up 29%) and Gold Quanto (up 158%). The growth in DGCX’s gold products is a strong indicator of how the precious metal retains and enhances its value in a period of high volatility. With the oil prices experiencing sharp fluctuations throughout the year, the volumes on DGCX’s energy products witnessed a significant jump of 206% from 2015.
Gaurang Desai, CEO of DGCX, commented: “2016 has been a remarkable year for DGCX which extended beyond the significant volume growth and multiple Open Interest records that we have been able to achieve. We have continued to deliver on our product strategy of launching innovative products such as Spot Gold and global Single Stock futures. The momentum has culminated in partnerships with large Chinese banks and exchanges. DGCX sealed a ground-breaking agreement with the Shanghai Gold Exchange to launch the Shanghai Gold contract in Dubai. This is the first time ever that an Exchange outside of China has been able to provide regional investors access to the world’s largest bullion market. Initiatives like these are truly unique for an Exchange and we will continue to push the envelope, creating long-term advantages for DGCX.”
Looking ahead to 2017
DGCX has created a robust product pipeline which includes initiatives focusing on the launch of Shanghai Gold Futures in Q1, regional currencies and the further expansion of its Energy product portfolio and Single Stock futures offering.
“Moving forward, we will continue to maintain our strategic focus on these core areas - introducing relevant yet unique products based on our market participants’ needs, growing our membership base and increasing our footprint,” added Gaurang.
On December 16, 2016, the European Commission announced that the United Arab Emirates has an equivalent regulatory regime for central counterparties (CCPs) to the European Union (EU). This development will contribute to a more confident market and enhancing cross border activity, leading to greater consolidation of markets.
“The UAE regulatory regime being recognized by the European Commission as an equivalent for CCPs is a positive development as we begin the New Year. This highlights the relentless efforts of SCA in its bid to strengthen regulatory oversight in the UAE. This will no doubt promote further growth of the clearing and settlement business in the region,” concluded Gaurang.
About DGCX: Established in 2005, DGCX is the region’s leading derivatives exchange and the only one allowing participants to clear and settle transactions within the Gulf region. The Exchange has played a pioneering role in developing the regional market for derivatives.
DGCX is a subsidiary of Dubai Multi Commodities Centre (DMCC), a strategic initiative of the Government of Dubai, with a mandate to enhance commodity trade flows through the Emirate by providing the appropriate physical, market, financial infrastructure and services required. It is an electronic commodity and currency derivatives exchange with 267 members from across the globe, offering futures and options contracts covering the precious metals, energy and currency sectors. For more information: www.dgcx.ae
Meng Chan Shu
Director of Business Development and Sales
Dubai Gold and Commodities Exchange
Tel: +9714 361 1660 Email: email@example.com