Dubai Mercantile Exchange prepares 20% share sale
The owners of the Dubai Mercantile Exchange's (DME) plan to sell a stake of up to 20% in the bourse soon to help boost liquidity and attract more international players, industry sources said on Wednesday.
The DME launched trading in June 2007 with a sour Middle East crude futures contract, aiming to become the benchmark for pricing in the world's top oil exporting region.
"The DME is keen to sell the stake soon," said one industry source. The Dubai exchange is looking to bring in big investment banks and oil companies that could boost trade volume," another source said. The DME declined to comment.
The contract has survived longer than past attempts to launch sour crude futures, but has yet to establish itself as a viable vehicle for investment funds and for companies looking to hedge exposure to future energy price risk.
The DME is owned by the New York Mercantile Exchange (NYMEX) and the governments of Dubai and Oman. The NYMEX reached a deal in March to merge with the CME Group, the world's largest derivatives exchange.
The DME would like to push through the stake sale before the CME merger is completed, one source said. NYMEX CEO James Newsome told Dubai Eye radio on 13 May that the DME has been approached by almost every major bank and every major energy company to buy an equity stake in the bourse.
"We are willing to give up to about 20%, not just for one new partner but for a group of new partners that have smaller equity stakes who can help us provide liquidity and volume in the exchange," Newsome said.
/Business Intelligence Middle East/
The DME launched trading in June 2007 with a sour Middle East crude futures contract, aiming to become the benchmark for pricing in the world's top oil exporting region.
"The DME is keen to sell the stake soon," said one industry source. The Dubai exchange is looking to bring in big investment banks and oil companies that could boost trade volume," another source said. The DME declined to comment.
The contract has survived longer than past attempts to launch sour crude futures, but has yet to establish itself as a viable vehicle for investment funds and for companies looking to hedge exposure to future energy price risk.
The DME is owned by the New York Mercantile Exchange (NYMEX) and the governments of Dubai and Oman. The NYMEX reached a deal in March to merge with the CME Group, the world's largest derivatives exchange.
The DME would like to push through the stake sale before the CME merger is completed, one source said. NYMEX CEO James Newsome told Dubai Eye radio on 13 May that the DME has been approached by almost every major bank and every major energy company to buy an equity stake in the bourse.
"We are willing to give up to about 20%, not just for one new partner but for a group of new partners that have smaller equity stakes who can help us provide liquidity and volume in the exchange," Newsome said.
/Business Intelligence Middle East/
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