Business Bureau, Gulf Today

The Dubai Gold and Commodities Exchange (DGCX) has registered its best ever month in its 14-year history, recording volumes of 2.382 million lots valued at over $39.2 billion in July, breaking the Exchange’s previous single month trading record of 2.16 million set in May 2018.

The stand-out performing contract in July was the Indian Rupee Quanto futures, which recorded its best month since inception with a total of 1,106,309 contracts traded, up 192 per cent year-on-year (Y-O-Y). DGCX’s flagship Gold Futures product also underpinned last month’s trading, building on its strong performance in June on the back of global instability, trading 61,764 contracts, up 209% Y-O-Y.

Les Male, CEO of DGCX, commented: “Trading and clearing more than 2.38 million contracts in a single month is a remarkable feat for the DGCX, and demonstrates our strong momentum and increasing appeal to investors and traders. July’s record trading numbers were driven by continued geopolitical tension and uncertainty, with the UK welcoming a new Prime Minister at a critical moment during the Brexit process, increased tensions between the US and UK with Iran, and a trade deal between the US and China showing few signs of progress.

“INR trading this month was particularly noteworthy, with trading of our INR Quanto futures product surpassing the 1 million mark in a month for the first time ever. The new record was set as investors looked for new hedging tools to match their increasingly complex needs, and turned to markets like the DGCX to fulfil these requirements.”

Euro Futures also performed strongly last month, recording its second highest Average Open Interest of 3,683. Open Interest is the total number of outstanding futures contracts held by market participants and is regarded as a leading performance indicator in the industry.

Earlier the Dubai Gold & Commodities Exchange (DGCX) and the Multi Derivatives Exchange Nepal (MDX), a proposed derivatives exchange in Nepal that has applied for a regulatory license from SEBON to operate a commodities and derivatives exchange, today announced the signing of a Memorandum of Understanding (MoU), agreeing to collaborate and share knowledge on areas of mutual benefit surrounding commodity trading. DGCX and MDX will host workshops and meetings to further the scale of the alliance and promote strong cooperation between the exchanges.  Under the MoU, DGCX will work closely with MDX in areas of shared interest including trading, clearing, settlement, delivery of contracts, compliance and surveillance, contract design and pricing, technology, and risk management.

Les Male, CEO of DGCX, added: “This agreement comes in accordance with our vision to expand our knowledge base, and foster more collaboration in the industry and across borders. At DGCX, we are always looking for innovative ways to develop and enhance our offering, and we are confident that this partnership will lead to a successful and fruitful outcome that is mutually beneficial to both parties.”

Dipak Raj Pandey, Coordinator of MDX, said: “DGCX and MDX share a common goal to follow international best practices and provide innovative derivatives products to our members. The signing of this MoU is a significant step towards productive collaboration, and will allow us to leverage each other’s strengths, knowledge and experiences.”

The Dubai Gold and Commodities Exchange (DGCX), has achieved considerable success over the past three years, enabling it to attain a leading international stature in the global commodities sector.

The value of gold and commodities traded by the DGCX, which is unique in the Middle East, rose to around Dhs4.85 trillion ($1.32 trillion), according to statistics issued by the Securities and Commodities Authority (SCA).

As the authority that regulates securities in the country, the SCA is the regulator of the DGCX, and in 2006, a memorandum of Understanding, MoU, was signed between the SCA, the DGCX and various commodity derivatives markets.

In 2018, the DGCX achieved record numbers of trades, amounting to 22.26 million contracts valued at $474.94 billion, exceeding the total from the previous year.

Its average daily trading volume amounted to 86,615 contracts while its record daily trading volume in 2018 happened on 13th August, totalling 185,630 contracts. May registered the highest monthly trading volume, amounting to 2,163,598 contracts while the number of contracts related to Indian Rupee products increased by 25 per cent since 2017. The value of currency contracts related to the six major countries grew by 9 per cent since 2018. July registered the highest number of open contracts, exceeding 300,000. In 2017, the value of contracts amounted to $404.69 billion, numbering 17.439 million contracts while the value of contracts in 2016 reached $439.5 billion, numbering around 16.669 million.