Asia and the Middle East has created quite a stir with its intensive activity in the commodity trading sector over recent times, the region being home to many new exchanges which are doing well at a time when global volumes are generally decreasing. One such exchange is the Dubai Gold and Commodities Exchanges (DGCX), which has signed a licensing agreement with MSCI, a leading provider of investment decision support tools, to create a futures contract based on the MSCI India Index.
The MSCI India Index represents 72 locally listed entities in India and covers approximately 85% of the Indian equity market. The MSCI India Index is designed to measure the performance of large and mid cap companies in India. The DGCX MSCI India Index Futures will act as an efficient hedging tool and will also facilitate trading mandates of global institutional investors seeking exposure to one of the world’s largest and fastest growing Emerging Markets.
This demonstrates the exchange’s commitment to the Asian markets, and adds strength to their corporate strategy which has been very rupee-centric as reported by Forex Magnates in an Executive Interview with DGCX Chief Executive Officer Gary Anderson.
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“We are delighted to work with MSCI to license a futures contract based on the MSCI India Index. This agreement is another important milestone for DGCX as it expands its product suite across the region and internationally. DGCX is seeking to develop a strong offshore platform for the trading of a range of Emerging Market (EM) contracts and the listing of DGCX MSCI India Index Futures is an important part of this strategy,” said Gary Anderson.
Since inception, DGCX has pioneered the development of the derivatives market in the Middle East, developing new and innovative trading opportunities for its members and customers. The DGCX MSCI India Index Futures is a natural progression of DGCX’s India-focused product portfolio which includes the Indian Rupee futures.
DGCX launched the world’s first Indian Rupee futures contract in 2007 and the contract has since recorded exceptional growth and been recognized as a landmark success story in the global derivatives industry. Currently, DGCX contributes about 25 – 30% of the global total exchange traded value of the Indian Rupee Futures contracts. The success of the contract has been primarily driven by the growing international investor interest in India’s economy and currency.
“This licensing agreement, the first we have signed with an exchange in the region for use of our indices as the basis of a listed futures contract, provides investors with yet another important tool for managing their portfolios benchmarked to MSCI equity indices,” said Baer Pettit, Managing Director and Global Head of the MSCI Index Business. “We look forward to continuing to work with DCGX as they develop their product suite in the region.”