The Dubai Gold and Commodities Exchange (DGCX) recorded its highest Open Interest (OI) of 94,056 contracts while volumes on the Exchange jumped 11 per cent from last year to top six million contracts during the first half (H1) of the year.

The Exchange ended H1-2015 with trading volumes of more than 6.4 million contracts, valued at over $185 billion.

DGCX’s Indian rupee futures emerged as the key performer registering H1 volumes growth of 15 per cent from 2014. Brisk trading in the contract led to the Exchange dominating the global Indian Rupee futures market in the month of June with a market share of 30.69 per cent.

June proved to be an exceptional month for the contract this year witnessing volumes of 904,044 contracts, an increase of 38 per cent from last year. The Exchange’s other Indian Rupee futures products also saw high growth.

Year-to-date 2015 trading volumes on the Mini Indian Rupee futures saw a growth of 10 per cent in June while Mini Indian Rupee contracts denominated in Euro (INR/EUR) and Pound Sterling (INR/GBP) grew 54 per cent and 37 per cent respectively. The overall currency segment represents the lion’s share of growth on the Exchange in H1-2015, growing by 41 per cent.

New product innovation

The success of DGCX’s newly listed contracts indicated the market’s endorsement of the Exchange’s latest product innovation. Its new products - India Gold Quanto futures, Indian Rupee Quanto futures and Mini Dubai Polypropylene futures - registered robust volumes of 85,684, 4,218 and 564 contracts respectively in June. The Indian Rupee Quanto contract recorded the Exchange’s highest ever launch day volume of 13,291 contracts on June 05, 2015.

The month of June saw the Exchange setting several new trading records. DGCX recorded its highest ever OI of 94,056 contracts on June 26, which is a key indicator of strong market confidence in DGCX. The Exchange also recorded its third highest average daily OI of 54,764 contracts in June 2015. In particular, the DGCX BSE Sensex contract recorded its highest ever average OI of 1,388 contracts on June 25.

Gaurang Desai, interim CEO of DGCX said: “The first half of 2015 has been a period of exceptional growth and achievement for DGCX. Apart from a strong increase in volumes, the first six months also saw the successful launch of innovative new products, growth in our member community and a series of partnerships that widened our reach in key overseas markets.”

“The record growth of our Indian Rupee contract can be attributed to the increasing demand from a broad base of global investors seeking efficient currency hedging instruments that offer greater market transparency and robust price discovery. Our newly launched contracts have also performed well, which is a clear indication that it has been received well by market participants.

“We work closely with our members on new products and seek their feedback on existing contracts. Our recent strategic decision to upsize our existing Plastics contract with the aim of making it more convenient for market players was based on feedback from market participants,” he added.

The Exchange is poised for a substantial diversification of its product portfolio with new contracts in the currency, hydrocarbon, precious metals, equity and agricultural segments due for launch in the second half of 2015. In particular, DGCX plans to revitalise its energy product basket by adding two to three products later this year. WTI crude futures, currently the only energy contract listed by the Exchange, witnessed an uptick in volumes due to the massive gyrations in prices. The contract recorded an increase of 41 per cent year-on-year and a sizable growth of 66 per cent in H1 2015 compared to same period last year.

Among other products, DGCX’s metals segment performed well with gold futures recording an increase of 8 per cent from last month. Volumes in silver and copper also rose by 140 per cent and 85 per cent respectively while volumes in the hydrocarbon segment recorded an increase of 40 per cent. The equities segment also witnessed a growth of 5 per cent from the previous month.

“With the launch of further new products in the second half of the year, the Exchange seeks to play an even more significant role in the development of the derivatives market in the UAE as well as the wider region, ‘’ added Desai.

Regulatory updates

Last month, DGCX and its CCP Operator arm, Dubai Commodities Clearing Corporation (DCCC) was granted the status of a ‘Recognised Body’ by the Dubai Financial Services Authority (DFSA), the regulatory authority for the Dubai International Financial Centre (DIFC). This will enable DIFC companies to access DGCX products and become members of the Exchange.

DGCX is making a substantial push for global compliance to further enhance its credibility among global financial institutions. The Exchange has applied to European Securities and Markets Authority (ESMA) for TC-CCP, (third country central country party recognition), which will allow European banks and institutions to take exposure on DGCX markets.

Global Alliances

This year, DGCX signed two MoUs with Chinese financial institutions – the Chinese Futures Association (CFA) and the Bank of China (BOC). These agreements pave the way for improved transfer of market information and sharing industry best practices between both regional markets.  

Snap Innovations, a multi-asset trading software and services specialist, became an approved independent software vendor (ISV) on the Exchange, boosting DGCX’s connectivity with Asian markets.

Market data

Additionally, the Exchange launched its own micro-website, providing in-depth analysis of trading data and price movements of DGCX products. – TradeArabia News Service