UAE’s leading derivatives bourse, the Dubai Gold and Commodities Exchange (DGCX), has recorded an all-time high of more than 19.7 million contracts in 2016 as heightened market volatility triggered by a series of notable events boosted trading on the exchange.
The standout figure marks the highest annual volume with a strong upswing seen across all its asset classes, growing 36 percent over 2015. DGCX also recorded an all-time figure for Average Daily Volumes (ADV) in 2016, with an average of 76,835 contracts exchanged in the marketplace, crossing the $439.5 billion mark in terms of the aggregate traded value.
The uptick in commodity prices was one of the main vehicles of growth at DGCX during last year after a rebound on speculation that recent production cuts are whittling away the surpluses that caused the price collapse. On the energy front, the marketplace recorded a massive growth throughout the year with volumes on DGCX’s energy products showing a significant jump of 206 percent from 2015.
Additionally, the unexpected results of the Brexit vote and US election had a positive impact on the DGCX’s gold basket which witnessed robust trading activity with 61 percent growth year-on-year.
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Building on the standout performance, the DGCX registered high volumes in the currency segment, with its flagship Indian rupee contract signifying the growth trajectory due to mounting concerns over Indian currency demonetization along with the US election results and the recent US Fed rate hikes – all of which had an impact on markets and volumes.
More specifically, the exchange reported an increase of 34 percent in trading volumes of the Indian rupee products. Meanwhile, the Indian rupee options contract saw a spike to 334,823 contracts whilst the average daily OI touched 8,963 contracts.
Fuelled by the Brexit developments and shocking results of European elections, euro and British pound futures also helped lead the charge, surging 8 percent and 167 percent respectively on a year-to-date basis. Other currency pairs also saw significant year-to-date growth with G6 futures chronicling a rise of 57%.
Commenting on the heightened trading activity, Gaurang Desai, CEO of Dubai Gold and Commodities Exchange, 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,” concluded Desai.