Dubai’s premier commodities exchange (DGCX) has being going from strength to strength as it takes advantage of volatility in the precious metals market as well as movements in the Indian rupee. The exchange announced today trading metrics for April 2013 whereby it saw trading volumes increase 139% YoY. This was complemented by the bourse’s total trading volume crossing a record $1 trillion since inception.
Trading volume for April totalled 1,336,942 contracts, valued at $48.73 billion, in March volumes totalled 1,072,052. April saw intense volatility in the gold market where the yellow metal dropped 8% in one trading day, this was the biggest one day drop since February 1983. The Dubai Gold and Commodities Exchange (DGCX) benefited from the aggressive moves in metals and on Tuesday April 16th the exchange recorded overall daily volumes record of 103,126 contracts surpassing the previous record of 83,862 contracts set on 12 April, 2013. The CBOE Volatility Index reached 17.50 in mid-April.
Gary Anderson, Chief Executive Officer at the DGCX spoke about the record trading volume the bourse achieved in the statement the company published: “We are delighted that our total traded value has crossed $1 trillion since inception, a milestone which represents DGCX’s rapid growth as a derivatives exchange since its launch in 2005. We are encouraged by the sustained high growth we have had in 2013, which provides us a strong foundation for achieving our strategic goals this year. In particular, the robust performance of DGCX’s newest contract, the Mini-Indian Rupee futures, in its first month, is a testament to the Exchange’s ability to provide market participants with innovative contracts that meet their investment and hedging needs within a highly supportive trading and clearing environment.”
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DGCX was established in 2005 in a joint venture between India’s Financial Technologies (a technology firm that established India’s MCX exchange) and Dubai’s DMCC (a government authority). The Exchange has been developing itself as a ‘go to’ trading venue for Middle Eastern and South Asian firms. The DGCX was the first overseas exchange to launch the Indian rupee currency future in 2007. INR futures were launched onshore in India in August 2008.
India has been one of Dubai’s largest trading partners and this has been one of the main reasons the INR futures contract has grown substantially. According to the Consulate General of India, in 2011 India remained the largest trading partner for Dubai accounting for 19% of Dubai foreign trade amounting to US$ 37.3 billion. Dubai’s imports from India touched US$ 27.77 billion, its exports to India amounting to US$ 9.80 billion and re-exports reaching US$ 18.79 billion. Major Indian exports included gems & jewellery, petroleum products, machinery, instruments. Major imports included gold, precious stones & gems, machinery and electronics.
The DGCX expanded its footprint as the ideal venue for off shore rupee currency futures by launching the mini INR contract. The new smaller size contract performed well in its first month of trading in April, the Mini Indian Rupee futures traded 44,161 contracts.