BFX trading turnover tops $27bn in 1st year
Manama, December 3, 2012
The Bahrain Financial Exchange (BFX), the first multi-asset exchange in the Mena region, has successfully completed one year of trading operations of its futures segment with a cumulative (single-side) turnover of $27.30 billion, said a senior official.
The first year of the BFX trading operations has witnessed significant achievements in product innovation, an increase in membership and customer-base as well as higher liquidity with lower trading costs due to narrow bid-ask spread, remarked Arshad Khan, the managing director and CEO of the BFX and the BFX Clearing and Depository Corporation (BCDC).
The cumulative trading turnover of the BFX Futures reached the first $10 billion milestone in 179 trading days; whereas, the next $10 billion mark was achieved in the subsequent 33 trading days. The cumulative trading volume reached the first half-a-million contracts mark in 225 trading days, with the subsequent half-a-million contracts being achieved in the subsequent 33 trading days.
The highest (single-side) daily trading turnover was $1,633.21 million (on August 31, 2012), and the highest daily trading volume achieved was 31,620 contracts (on November 16, 2012).
The total turnover on the BFX Futures segment crossed $27 billion with a trading volume of more than one million contracts as on November 23, said Khan.
The average daily trading volume increased from 100 contracts per day in January 2012 to 17,262 contracts per day in November 2012, an increase of over 172 times. The average daily trading turnover peaked at $325.64 million in August 2012.
The open interest on the BFX Futures increased to 6,780 contracts on the 23rd of November 2012, an increase of 50.22 times over the highest open interest in the March 2012 Futures.
Commenting on the achievement, Abdul Rahman Al Baker, the executive director of Financial Institutions Supervision at the Central Bank of Bahrain said, “We congratulate the Bahrain Financial Exchange on the successful completion of their first year of trading. The exchange is well positioned to grow its market share in the Mena region and capture solid opportunities in Bahrain and beyond, and we wish them a prosperous year ahead.”
The BFX chief said the launch of the unique BFX Futures on the US dollar versus the Indian Rupee (USD-INR) currency pair as an Index had heralded the innovative capabilities of the exchange.
The BFX USD-INR Index Futures won the “Most Innovative Forex Product” award at the Jordan Forex Expo & Award (JFEX) earlier this year. In a short span of time, the BFX Futures on the USD-INR currency pair has clocked a cumulative trading turnover of $23.33 billion with a trading volume of 954,179 contracts.
"The BFX USD-INR Index Mini Futures (with a contract value as low as $5,500 at prevailing prices) has attracted participation from the retail segment and smaller traders; whereas, the BFX USD-INR Index Futures (with a contract value of $55,000) has become popular among larger traders and institutional investors," he noted.
The next highest traded contract was the BFX Gold Futures which registered a trading volume of 69,887 contracts ($3.57 billion), followed by the BFX EUR-USD Futures (11,809 contracts; $385.19 million) and the BFX Natural Gas Futures (2,026 contracts; $12.52 million).
The BFX has emerged as one of the fastest growing financial exchanges in the region. With the Kingdom becoming an attractive and alternative investment destination for several financial institutions and investors globally, the cumulative trading turnover on the BFX markets is expected to witness significant increase in its trading volumes.
"Seeing the BFX growth, many foreign financial institutions have set-up or are setting up operations in Bahrain to take a BFX membership. Several others have taken remote memberships of the BFX and are trading from foreign jurisdictions. This is contributing positively to the economy of Bahrain and to the success of the BFX," said Khan.
The trading hours of the BFX markets are from 6am to 9:30pm which enables market participants to align their trading strategies with the international reference markets in the US, Europe and Asia, he pointed out.
According to him, the BFX is scheduled to launch other innovative products in the next twelve months across various asset classes and instrument types.
There has been an increase in interest from the international financial institutions for taking the BFX membership, particularly due to the attractiveness of the business-friendly environment of the Kingdom and the uniqueness of the BFX markets and products.
The successful completion of the first year of operations is a testimony to the technological and operational capabilities of the BFX and its parent company Financial Technologies Group (FT Group) in establishing successful exchange ventures worldwide, he added.-TradeArabia News Service