Two new crude contracts to be listed on DGC

Dubai Gold and Commodities Exchange (DGCX) yesterday said it would start trading two crude oil futures contracts from May 27.
Malcolm Wall Morris, CEO of the Dubai-based futures exchange, said the new contracts would be based on the world's two most significant crude oil benchmarks — West Texas Intermediate Light Sweet Crude (WTI) Oil and Brent Crude Oil (DBRC).

The launch of WTI and Brent Crude Oil futures on DGCX, a week ahead of a similar cash-settled Brent contract by the Dubai Mercantile Exchange, makes the world's two most significant crude oil benchmarks available to both regional and international market participants, allowing them to benefit from trading and clearing transactions under the UAE regulatory and taxation regimes.

Morris said the exchange was responding to customer demand by removing cost and time inefficiencies. "The WTI contract will be settled based on prices on the New York Mercantile Exchange (Nymex) and the Brent contract on prices on the Intercontinental Exchange, (ICE). Both contracts, denominated in U.S. dollars, will be cleared by the Emirates Securities and Commodities Authority."

"Since the start of trading in November 2005, DGCX has demonstrated, under the regulatory guidance and support of the Emirates Securities and Commodities Authority (ESCA), the existence of large liquidity pools in the Middle East and the growing need of market participants to access viable risk management and investment tools. This combined with the increased recognition from our international clients of the benefits of transacting and clearing business from within the UAE, makes our new offering an extremely attractive proposition,” he said. "Making the world's crude oil benchmarks available directly to the world's premier oil producing region and allowing regional participants to maintain business within the Middle East has benefit beyond measure.”

A fee waiver will be in place for the DBRC and WTI Crude futures contracts from launch through to 26th August 2008.

The new DGCX oil futures contracts will trade from 08:30 a.m. to 11:30 p.m. local Dubai time or from 04:30 a.m. through 07:30 p.m. GMT or from 00:30 am through 03:30pm Eastern time. Each DGCX crude oil futures contract is sized at 1,000 barrels, with the contract price quoted in US dollars and cents per barrel. The minimum price fluctuation will be one cent per barrel, equivalent to a tick value of $10.00, Morris explained.

DGCX is also planning to launch plastics futures contracts in the first half of this year. Dubai Mercantile is also planning the same.

Gary King, Dubai Mercantile's chief executive officer, was quoted by Bloomberg its futures contracts will clear at the Nymex Clearinghouse and will offer the same safeguards and standards and net-margining benefits as its existing contracts and the Nymex energy contracts. The contracts will add Dubai Mercantile's Oman Crude Oil Futures Contract, which King said is the first Middle East sour crude still trading a year after it started.

DGCX, a venture between the Dubai Multi Commodities Centre, Financial Technologies India Ltd. and the Multi-Commodity Exchange of India Ltd, made its debut with the gold contract trading in November 2005, followed by silver, the pound, euro and yen currencies, and fuel oil and steel. Dubai Mercantile is a venture of Nymex Holdings Inc., Dubai Holding LLC and the Oman Investment Fund.
/Khallej Times/

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Dubai eyes global commodities receipt in Europe

State-owned Dubai Multi Commodities Centre (DMCC) plans to extend its global electronic warehouse financing instrument to Europe in the wake of the global credit crunch, a senior official said on Monday.

The Global Multi Commodities Receipt (GMR), launched last November in Singapore, Malaysia and South Korea, allows businesses to access lines of credit against their inventories by pledging them in favour of member banks.

It can also be used for electronic transfer of title to the goods covered by it, to others within the system and through a transfer endorsement.

"If you look at the current situation in the banking sector and international markets, you will see the crucial need for companies to leverage without undue reliance on typical balance sheet finance," said Ashok Das, DMCC's executive director of soft commodities and commodity trade finance.

"We are planning to introduce this facility to other destinations ... and we are currently looking into launching GMRs in Europe, maybe this year," he told Reuters in an interview.

Dubai, the Gulf's trade and tourism hub, launched the region's first futures exchange, in which DMCC owns a majority stake, in 2005 as the economies of the Gulf Arab nations boomed on windfall oil income.

Traditionally, traders have extended loans to each other based on "trust and reputation" rather than lending against inventories.

The commodities-backed model will help banks and financial institutions to mitigate risk in a financing transaction.

The receipt can be also used as a title document in the trading of goods and for physical delivery of commodities from the selected global locations into the Dubai Gold and Commodities Exchange (DGCX).

"You can just track your inventory online and have easy access to financing facilities without spending a long time filling in hundreds of papers," Das said.
"In case of a credit default, the lender can rely on the value of the existing inventory, which gets sold in a bilateral trade arranged by the DMCC," he said.
The GMR platform has 16 banks, including HSBC and Fortis , and 110 companies fully integrated into the system.

"We expect a growing number of companies to sign up to use this facilities ... especially with the commodities market booming here and the launch of plastics futures contracts," he added.

The DMCC expects to trade low-density polyethylene, high- density polyethylene, linear low-density polyethylene and polypropylene later this year to cater to the rapidly growing petrochemicals market in the Middle East.
For each grade, there will be three regional contracts: Northeast Asia, Southeast Asia and the Middle East.

In March, the DMCC said it planned to set up an investment firm to develop and manage a range of Sharia-compliant commodities products, as part of Dubai's plans to become a centre for commodities trading.
/Reuters/

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Dubai gold futures volume down 19pc

The volume of gold futures traded on the Dubai Gold and Commodities Exchange (DGCX) fell 19 percent in March as price volatility in international markets prompted investor caution, the bourse said yesterday. DGCX traded 77,996 gold futures contracts in March, down from 96,099 contracts the previous month, it said in a statement to Reuters.

Total volumes of all contracts—commodities and currencies – traded on DGCX in March stood at 96,192 contracts, up 12 percent from the same period last year, and down 18 percent from the previous month, DGCX said. Gold fell yesterday after erasing overnight gains, as the dollar’s recovery against key currencies lowered the metal’s appeal as an alternative investment.

Spot gold rose as high as $889.10 an ounce and was quoted at $881.95/882.95 at 1020 GMT, against $886.30/888.30 in New York late on Friday, when it hit a 10-day high of $889.80. The precious metal slipped below $900 in April and has since shown little resilience. It hit a record high of $1,030.80 in March.

Dubai launched the region’s first gold futures exchange in 2005 as the economies of Gulf Arab nations boomed on oil income. Total open interest for gold as of March 31 stood at 1,877 contracts, down from 3,894 contracts on Feb. 29, the bourse said.

Dubai is a long-established market for gold bullion as well as wholesale and retail jewellery. Trade has benefited from strong demand from the Arab world and proximity to India.

The average number of gold contracts traded per day stood at 3,900 in March, compared to 4,576 in the previous month, the exchange said.
/Peninsula Online/

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Shariah-compliant gold shares to be listed on Dubai bourse

The Dubai Multi Commodities Centre (DMCC) and World Gold Council (WGC) have formed a new company to launch exchange-traded gold securities in Dubai to offer a Sharia-compliant investment choice.

The dollar-denominated Dubai Gold Shares will be traded on the Dubai International Financial Exchange (DIFX) after the companies receive approval from the Dubai Financial Services Authority.

The shares will be fully backed by physical gold and allow investors to gain exposure to gold bullion.

WGC, an industry body funded by the world's leading gold mining companies, said Dubai Gold Shares will be part of its portfolio of exchange-traded gold (ETG) products.

Officials of both WGC and DMCC did not disclose their share in the Dubai Gold Investments joint venture.

The physical gold bars backing the product will be of Dubai and London Good Delivery Standard, and held in the vaults of the custodian, DMCC, and sub-custodian, HSBC. Source

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DMCC and Nakheel to work together on emissions reduction projects

Dubai Multi Commodities Centre (DMCC) and Nakheel, Dubai's premier development company, have signed a Memorandum of Understanding to jointly identify and develop emissions reduction projects across the whole of Nakheel's operations.

DMCC and its partner, carbon reduction project developer EcoSecurities, will work with Nakheel to identify potential projects for reducing greenhouse gas emissions and improving energy efficiency. DMCC will facilitate the development of the CDM component of these projects, which in turn will create value by generating Certified Emissions Reduction (CERs) credits that can be traded on global carbon markets. This will enhance Dubai's position as a leading centre for carbon emissions reduction initiatives and firmly establish its place within one of the world's most rapidly growing industries.

Nakheel's groundbreaking innovation is already changing how the world views the future of urban design. This partnership with DMCC will ensure that such innovation is accompanied by environmental best practices that create a valuable and sustainable legacy for generations to come.

'Energy conservation and the reduction of greenhouse gas emissions are the main obstacles for Dubai to overcome, if it is to continue delivering both cutting edge and iconic developments and long-term environmental sustainability,' said Ahmed Bin Sulayem, DMCC Executive Chairman.

'The combination of DMCC's expertise in CDM project development and Nakheel's position as a world leader in innovative urban project design creates a strong partnership for ensuring these challenges are met.'



Nakheel's Chief Executive Officer Chris O'Donnell, added: 'Nakheel has always been committed to providing ambitious and innovative low-carbon solutions that will ensure long-term environmental sustainability across our various projects. We are delighted to be working with DMCC to develop a proactive approach in identifying clean emissions solutions that will further enhance the sustainability of our developments.'

'The opportunity to collaborate with experts on low-carbon and CDM opportunities from the start of the feasibility and outline design stages of our developments will enable Nakheel to effectively deliver solutions with longevity' added Nakheel's Michael Nates, Senior General Manager, HSE & Sustainability. 'This agreement will support Nakheel's drive to integrate international best practices into and throughout our business operations.'

DMCC signed an MOU with EcoSecurities in June 2007 to promote CDM projects, and generate emission reduction credits within the UAE, while building the profile of Dubai as a regional centre for carbon emission reductions and trading. (AME Info)

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DMCC plans to build cotton trade corridor

Dubai Multi Commodities Centre (DMCC) announced yesterday that it is proposing to build a cotton trade corridor through Dubai with the objective of establishing the emirate as a key link in the global cotton supply chain.

In this regard, DMCC has signed a Memorandum of Understanding (MoU) with Uzprommashimpeks, a trading company set up under Uzbekistan's Ministry of Foreign Economic Relations and International Trade. In 2007, global cotton production touched 26.74 million tonnes, with Uzbekistan being the second largest exporter after the US. Imports and re-exports through Dubai were nominal with major re-export destinations being Pakistan and Algeria.

The MoU, which coincided with the recent visit to the UAE of Islam Karimov, the Uzbekistan President, was signed by Ahmed bin Sulayem, Executive Chairman, DMCC and Mirzakhidov Khurshid, Chairman of the State Joint Stock Company, Uzprommashimpeks.

Elyor M. Ganiev, the Uzbekistan Minister of Foreign Economic Relations & International Trade "MFERIT," who was present at the signing of the MoU, said: "Uzbekistan and the UAE have a history of friendly relations, and we look forward to building on this through strengthening our economic partnerships. We welcome this MoU, which is one of many such steps being taken in this direction. In signing this MoU with DMCC, Uzbekistan supports the status of Dubai as an international centre for trade."

According to the terms of the MoU, Uzbekistan's cotton exports will be routed through the proposed cotton distribution hub in Dubai, for feeding Uzbek cotton into Asian markets. As a significant trade partnership between Uzbekistan and Dubai, this MoU will facilitate Uzbek cotton in gaining access to new markets in Asia.

The partnership also underlines DMCC's efforts in creating industry-specific infrastructure for facilitating physical trade in a wide range of soft commodities, including cotton. The Dubai-based, special purpose, DMCC-owned trading entity will offer online quotes and provide easy access to Uzbek cotton with convenient shipments to consumers in the sub-continent, China and other Asian countries.

In addition, DMCC will facilitate trade finance for cotton inventory purchased by traders and stored in Dubai through its indigenously developed Global Multi Commodities Receipt. (MENAFN)

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‘Pearls of Arabia’

Dubai Multi Commodities Centre (DMCC) on Monday unveiled plans for the 6,000 square metre ‘Pearls of Arabia’, featuring a cultural heritage centre, performing arts theatre, exhibition gallery and restaurant, alongside boutiques inviting participation from leading names in the pearl industry.

The complex, expected to launch by the end of 2010 in association with Paspaley Pearling Co, will be accessible by water ferries, which will transport visitors across the manmade archipelago of The World’s 300 islands.
The project marks the first phase in the emirate’s ‘pearl strategy’, which includes plans to develop the global and regional pearl market, focusing on trading, grading, trade events and auctions as well as trade and consumer education, DMCC said in a statement.

The Dubai Pearl Exchange offers an exclusive trading platform and a free-trade environment for regional and international pearl traders. Other initiatives include the planned introduction of a uniform certification for pearls, based on globally recognised standards.

It is almost a century since the last pearling fleet lifted anchor from Dubai, which was once the pearl centre of the Gulf. Pearling at one time accounted for some 80,000 jobs in the UAE, representing 95% of the country’s total revenues.

Nicholas Paspaley, executive chairman of Paspaley Pearling said “Historically, Dubai served as the world’s hub in the trade of fine quality natural pearls. Now, almost 100 years later we are delighted to collaborate with DMCC to revitalise the region’s traditional association with pearls.

“Dubai will present to the world the best selection of pearls and pearl jewellery that the 21st century pearling industry has to offer, and will showcase the beautiful history and story of pearls”. Source

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Dubai Gold Receipt enables financing of over US$100 million

Secured financing has reached unprecedented levels in the UAE with the Dubai Gold Receipt (DGR) enabling financing of over US$100 million over the past eight months, according to an announcement from Dubai Multi Commodities Centre (DMCC).

Gold traders, bullion banks and vault operators have used DGR, an electronic vault receipt system operated by DMCC, to enable US$103.8 million of financing against a total of 4,442 kgs of gold and 1,500 kgs of silver stored in DMCC-approved vaults in the UAE. All DMCC-approved vault operators - Brinks Global Services, Transguard and Group 4 Securicor International - have been utilised for these transactions.

DGR, an innovative tool for facilitating trade finance activities for gold and silver, is an integrated electronic vault receipt system designed to enable businesses to access lines of credit against their inventories, by pledging them in favour of member banks.

Under the terms of DGR, members who store precious metal in a DMCC-approved bullion vault - can be issued an electronic DGR against the value of the goods. The member can then use the online vault receipt to obtain financing from member banks and financiers.

The unique design of DMCC?s DGR system means that its geographical footprint can extend beyond the country, and gold traders resident across the world can access lines of credit from globally-based bankers/financiers, against their gold stored in UAE-based vaults.

Ahmed bin Sulayem, Executive Chairman, DMCC, said: ?Access to finance is one of the most crucial factors that drives commodity trade worldwide. Given the current volatility in global gold markets and the ensuing Basel II regime, banks are on the lookout for secured lending options that enable them to mitigate risk better.

''DMCC is committed to enhancing physical infrastructure and ancillary services for the gold and precious metals sector, and has developed this innovative, tradeable, electronic vault receipt that may be used for effective risk mitigation by banks. DGR thus offers traders and banks alike an ideal trade financing tool.? Ian MacDonald, Executive Director, Gold and Precious Metals, DMCC, said: ?The confidence that both traders and bankers place in the DGR model is evident from the fact that it has enabled financing of over US$100 million in a span of only eight months. Most importantly, DGR is increasingly being recognised as an innovative risk mitigating trade financing tool, and even international banks are utilising the DGR to finance gold stored in the emirate.

We are confident that DGR will see many more landmark transactions in the future.? The DGR system also enables transfer of title to the underlying gold or silver to trader members within the system, through an electronic transfer endorsement process. DMCC has established a set legal framework that governs each electronic transaction so that members are provided with the opportunity to trade their goods with increased confidence among a network of approved associates.

The title transfer functionality also enables members to carry out physical deliveries in the UAE against the gold or silver futures contracts traded on the Dubai Gold and Commodities Exchange, a DMCC initiative.(WAM)

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ICA to launch Dubai's first gemstone fair

In its recent press release the International Colored Gemstone Association (ICA) said that it will launch the ICA International Gem Fair Dubai 2008, between October 13-15, 2008. The event will be co-organised by Dubai Multi Commodities Centre (DMCC) and supported by the ICA GemBureau Middle East. This B2B event is the first of it kind in Dubai and hosted to position Dubai as leading global hub for colored stones trade. It will be held in Dubai spanning three days.

Over 150 exhibitors from the Middle East, Thailand, India, China, Hong Kong, Brazil, Australia, USA, Germany and Japan would participate including members of the ICA, DMCC and the Dubai Gems Club, representations from key colored stone producing countries worldwide. The ICA intends to ensure that the event is accessible only to ethical gem traders.

Mr. Andrew Cody, President of the ICA, said: "Dubai has established itself as a prominent international center for the precious commodities trade. Capitalising on Dubai's established and prospering retail jewellery industry, we are confident that the ICA International Gem Fair will evolve into an important highlight in the calendar of the global colored stones industry."

Ms. Gaiti Rabbani, Executive Director, Colored Stones and Pearls division, DMCC said, “The ICA Gem Fair will effectively fill the gap in the current product offering for the regional trade, and will enable the growth of the physical trade in colored gemstones in Dubai. The DMCC promotes coloured gemstones through its own dedicated Colored Stones and Pearls division and has set up a Middle East ICA GemBureau along with ICA. Source

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DMCC launches new clean energy partnership

Dubai Multi Commodities Centre (DMCC) said on Tuesday it signed a deal with two United Arab Emirates firms to help develop clean energy projects in the oil exporting region.
Crescent Petroleum and Dana Gas DANA.AD are eyeing oil and gas projects in the Middle East that could cut greenhouse gas emissions and generate carbon emissions reduction certificates (CER).

The DMCC's main partner, UK-based carbon-credit firm EcoSecurities , and the two companies will later look at similar projects worldwide.

"Our emphasis will be on the Middle East and we have already started in Egypt. But we will be looking at companies outside the region," said Badr Jafar, Crescent Petroleum's executive director.

Crescent Petroleum is a shareholder in Dana Gas.

Famed for its man-made islands, non-stop construction and cavernous air-conditioned shopping malls, Dubai is part of UAE, one of the highest per capita producers of greenhouse gas in the world.

The DMCC hopes to become a centre for trading greenhouse gas emissions permits, diving into a fast growing market and the potential to turn the region's sizeable carbon footprint into cash.

Under the Kyoto Protocol developing countries can sell emissions reductions from their energy-intensive industry to help rich countries offset their own contribution to climate change.

The Middle East is a major contributor to greenhouse gas emissions through its oil and gas industry which produces over 30 percent of global oil supply and over 10 percent of its gas. (Reuters)

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Diamond trade grew by a third during the third quarter

Dubai’s rough diamond trade grew by nearly a third during the third quarter, with the emirate seeing significant increases in both imports and exports of the precious stones.

The Dubai Diamond Exchange (DDE) said on Wednesday total trade in diamonds in the emirate reached $1.08 billion in the three months to the end of September, up 31% on the same period last year.
Rough diamond imports into Dubai increased 32% year-on-year to $447.6 million, while exports rose 30% on last year to $640.2 million, said DDE.
DDE is a subsidiary of the Dubai Multi Commodities Centre (DMCC).

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