The Dubai Gold & Commodities Exchange (DGCX) has tendered a strategic agreement with the Agricultural Bank of China (ABC)-DIFC Branch, one of the largest commercial banking constructs in China – the deal will help foster greater symbiosis between the DGCX and the Chinese lender, per a recent DGCX report.
The DGCX is one of the largest exchanges in the Gulf region, which is responsible for a variety of derivatives products and offerings. ABC is China's third largest lender by assets with listings on both the Shanghai Stock Exchange and Hong Kong Stock Exchange. The latest accord between the two venues will aim to focus on such areas as product development, strategy and exchange related market intelligence – overall however the primary impetus behind the pact will be the augmented association between the DGCX and its Chinese interests and other partners.
Existing Ties
The deal has its roots back in 2013 when ABC initially moved to establish its presence in the United Arab Emirates (UAE), culminating in the launch of a branch in DIFC. This initiative has manifested itself over the past few years with broader listings such as a 1 billion Chinese yuan bond on Nasdaq Dubai, including other MENA offerings.
Overall, the deal looks to be important for both sides as the institutional entities look to cement their mutual relations in the Gulf region, effectively building on a string of existing efforts over the past few years to accomplish this aim.
Gauging Desai, CEO, DGCX
According to Gaurang Desai, Chief Executive Officer (CEO) of DGCX, in a recent statement on the partnership: "ABC's vast customer network, increasing local presence, coupled with DGCX's expertise in the precious metals, commodities and derivatives provides an exciting platform to develop product and services that our shared customer base desires. We want to actively facilitate the tradeflows in the precious metals and commodities between China and the Middle East."
"Promoting the precious metals and commodities business has been a focus area for us in the Middle East. In line with this business objective, a strategic collaboration with an Exchange like DGCX which is known to have a great portfolio of derivative products and influence across the regional financial markets, is beneficial for both parties as we combine our relevant area of expertise and experience," added Fang Min, General Manager of Agricultural Bank of China (DIFC branch), in an accompanying statement.
The DGCX recently made headlines last month after it appointed former HSBC executive Abdullah Harmoozi as the newest head of its business development for the Middle East and North Africa (MENA) region. In his new role at the DGCX, Mr. Harmoozi has taken charge of the group’s business development team, helping grow the exchange’s market share across the MENA region.
