Dubai Gold and Commodities Exchange (DGCX), the region’s largest and most diversified derivatives bourse, closed the year on a high note, recording  a growth of 36 per cent over 2015.

In 2016, the exchange reached its highest annual volume traded with an aggregate of 19.7 million contracts, valued at $439.5 billion, said a DGCX statement.

2016 saw substantial global volatility triggered by a series of notable events including Brexit, Indian currency demonetization, the US election results and the recent US Fed rate hikes. All of these had an impact on markets and volumes, culminating in the DGCX marking its highest Open Interest (OI) of 665,058 valued at $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, said the statement.

Trading an average of 76,835 contracts per day in 2016, DGCX also achieved its highest average daily volumes (ADV) in its 11 years of operation.

DGCX’s currency segment was the outstanding performer in 2016, growing 34 per cent from last year. The Indian Rupee products led the growth within currency segment, recording a substantial increase of 34 per cent from last year. The Indian Rupee Options contract traded its 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 per cent.
 
The DGCX gold basket registered growth of 61 per cent in 2016. DGCX’s gold products all performed strongly - Gold futures (up 29 per cent) and Gold Quanto (up 158 per cent). 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 per cent from 2015.

Gaurang Desai, CEO of DGCX, said: “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,” he said.

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, said the statement.

“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.    

Regulatory update
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, he said.

“The UAE regulatory regime being recognised 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. - TradeArabia News Service