FACE VALUE | Gaurang Desai
Additionally, we are planning to expand our existing offerings in energy, metals and currencies verticals.
In December 2015, DGCX launched Spot Gold segment enabling investors to buy and sell physical 1kg bars on the exchange for the first time. How has been the response till now? What challenges you see in this contract attracting liquidity considering strong retail and institutional industry that already exists in Dubai for trading in Gold? In Dubai and the wider region, physical trading in gold has so far been primarily driven by the bi-lateral Over-the-counter (OTC) model and has been plagued with a number of limitations that makes scaling up of operations difficult for a large number of participants. With the launch of Dubai Spot Gold contract (DGSG), DGCX provided a transparent, safe alternative and a unique mechanism that marries advantages of OTC deals with benefits of exchange-traded products for the first time in the region. With the launch of DGSG, gold trading within Dubai and the region will be able to address some of the key limitations of the OTC model. DGSG contract aims to play a complementary role to current market structure by providing better price transparency, risk management and liquidity with other advantages such as ‘netting off’, not available under OTC system. Since the launch of DGSG, the exchange has witnessed a surge of interest in the contract. In less than a month, DGSG contract has registered traded volume of 564 kg with a delivery of 44 kg of gold over multiple delivery cycles. With various advantages over the traditional OTC market for gold, DGSG contract is all set to make its mark in the New Year and we hope that DGSG contract soon becomes the Spot Gold product of choice for Dubai and the region.
What are the other spot commodities that you may add in this segment in future? We continue to evaluate the feedback from the launch of Spot Gold and are studying the needs of market participants in the region in line with various suggestions received regarding the development needs of the market in general. We will share more details on new product developments as we progress.
February 2016 |
www.wealth-monitor.com
DGCX has been predominantly a commodities and currencies exchange. But you are changing the business dynamics by launching the Single Stock Futures this month. What is the rationale behind such a move? Will this help DGCX to shore up participation from local brokerage houses who till now been are keeping a muted approach towards DGCX products? Contrary to the perception, DGCX has sizeable presence amongst local broking and investing community and we remain committed to enhance the same by offering a number of relevant products to investors and traders in the region. The launch of Global Equity Futures is the first step in this direction and we will create a lot more opportunities for local brokerage and trading community in the coming days.
You are starting with stock futures on US and Indian stocks when you see adding local stocks in this product basket. Will you be partnering with any regional exchanges to launch futures on their stocks and indices? DGCX strongly believes in creating value proposition for its customers and provide necessary platform to meet the needs of participants. Every year, a huge amount of investible funds is remitted outside the UAE and GCC markets in search of credible investment options and we see a great potential in this segment. We believe this will also help better investment climate in region and spur economic growth in these challenging times. We remain open to explore all ideas that creates value for our stakeholders and partners.
The launch comes at a time when regional and global equities markets are under tremendous pressure and moving only in one direction. What volumes you expect under such market conditions? Why investors will choose to trade on DGCX for these stocks when they can trade them on the native exchanges in US and India? There are a number of reasons for investors and traders to select DGCX as the platform of choice for trading Global Stock Futures. Some of them are: a) Single Stock Futures (SSF) allows traders and investors to participate in the
14.5m
trading volumes of contracts recorded by DGCX last year
The highest ever
DGCX has sizeable presence amongst local broking
and INVESTING COMMUNITY and we remain committed to
enhance the same by offering a
number of relevant products to
INVESTORS AND TRADERS in the region
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