Brexit, Fed rate hike possibility boost trading on DGCX

The Dubai Gold & Commodities Exchange (DGCX) witnessed a flurry of trading activity during the month of May due to uncertainty over Britain’s exit from the European Union and also a possible interest rate hike by the Fed in June.

The Exchange witnessed a strong upswing across its precious metals, hydrocarbon and equities segments, trading an aggregate of 1.5 million contracts in May, growing 55 per cent from last year, while Year-To-Date (YTD) volumes saw an increase of 47 per cent from last year, trading over 7.7 million contracts so far this year.

Open Interest records

DGCX recorded a sharp increase in its monthly Average Open Interest (OI) of 118,000 contracts, a substantial increase of 236 per cent from the same period last year. Looking at a month-on-month comparison, the Exchange recorded the highest Average OI in WTI Mini, US SSF and Rupee Quanto, growing 38 per cent, 83 per cent and 47 per cent respectively. 

Gaurang Desai, Chief Executive Officer of the Exchange, said “The heightened level of trading activity in a number of DGCX products across asset classes and highest monthly open interest as yet for 2016 is a testimony to the fact that market participants are increasingly hedging their risk exposure through derivatives markets. We are working hard to expand our product range and deliver a greater number of trading solutions to meet the evolving needs of market participants in the region.”

Performance of product segments

DGCX’s precious metals segment, a key performer for the month, grew 225 per cent over the same period last year – trading over 80,000 contracts. The Exchange’s flagship contract – Gold futures saw a record high of 97 per cent from last year. DGCX’s Gold portfolio comprising of a Gold futures contract, a Quanto contract and a Dubai Spot contract has had its best run in the last 12 months, growing at 223 per cent  over the same period last year.

DGCX’s hydrocarbon segment saw a brisk trading close to 17,500 contracts with average volumes in WTI Crude Oil recording an impressive increase of 233 per cent on YTD basis. Similarly, trading on the mini sized WTI futures contract gained momentum, recording the highest ever volumes with 10,092 contracts, valued at over $47 million.

Within DGCX’s equities portfolio, Sensex futures saw a substantial increase in volumes – trading an average of 804 contracts a day in the month of May, up 71 per cent from over previous month.

In DGCX’s currency segment, Mini Indian Rupee futures and Indian Rupee options led growth with an increase of 97 per cent and 48 per cent respectively on a Year-on-Year basis. Among the G6 currency pairs, Euro and British Pound futures delivered a strong performance growing  160 per cent and 170 per cent respectively on a Year-To-Date basis.

Follow Emirates 24|7 on Google News.