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Abu Dhabi, UAETuesday 16 October 2018

DGCX hit record first-half volumes as trading value crosses $250bn

The exchange traded more than 11.3 million contracts in the first half of 2018

Dubai Gold and Commodities Exchange (DGCX) trading volume and value hit a record in the first half of 2018.  Ravindranath K / The National
Dubai Gold and Commodities Exchange (DGCX) trading volume and value hit a record in the first half of 2018.  Ravindranath K / The National

Dubai Gold and Commodities Exchange (DGCX), a derivatives exchange in the emirate, on Saturday said the number of traded contracts and their value rose to records in the first six months of the year, making the period best-ever in its 13-year history.

DGCX, which is a subsidiary of free zone Dubai Multi Commodities Centre, traded more than 11.3 million contracts in the first half of 2018, a 44 per cent year-on-year rise. Traded value for the period topped $250 billion, DGCX said.

The record performance was supported by trading in June, which saw more than 2 million contracts changing hands, up 74 per cent volume increase from a year earlier. Traded value reached $42.3bn, it added.

“Not only have we broken our record for the overall volume and value of contracts traded in the first six months of a year, but we’ve also set new highs in terms of Open Interest [OI] on several products,” Les Male, the chief executive of DGCX, said of the bourse’s first half performance.

The DGCX OI - the number of contracts or commitments outstanding in futures and options trading on an exchange at any one time – during the first half of this year also climbed by 28 per cent from a year earlier.

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“While our exceptional results have been bolstered by geopolitical uncertainty throughout 2018, with traders seeking protection and various hedging mechanisms to mitigate their risk, they have also been driven by the Exchange’s ability to enhance liquidity and widen investor participation in both established and new products,” Mr Male said.

DGCX, which is an electronic commodity platform with more than 200 members from across the globe, offers futures and options contracts covering the precious metals, energy, equities and currency sectors. The best performing asset classes this year have been the currencies with the Indian rupee (INR) and the G6 currency futures outshining the rest.

First half INR volumes jumped by 22 per cent from last year, driven mainly by increasing hedging appetite in the wake of rising volatility in the markets. Volumes in G6 futures grew 97 per cent year-on-year to reach 387,586 contracts. Dubai India Gold, Shanghai Gold and Chinese Yuan were the other assets that saw increased trading, it said.

The exchange has received positive response from investors to its shariah-compliant Spot Gold contract. It “demonstrate our initiative towards further asset class diversity on the DGCX,” the chief executive said, adding that since the launch of the gold contract in March, DGCX has traded more than 520 kilograms of the commodity worth $22 million.