Whilst the world's stalwart executing venues and FX firms are beginning to experience a drop in volumes during 2013's twilight weeks, representing a contrast to the unprecedented start to the year.
Gary Anderson, CEO, DGCX
Asia's emerging exchanges have begun to demonstrate a promising future, with the Dubai Gold and Commodities Exchange (DGCX) being a particular niche venue which bucks the overall trend which is making its presence felt within the establishment, with a 51% increase in volumes during November compared with the same period last year, with 12.9 million contracts having been completed.
FX Boom At Dubai Venue
The Exchange’s flagship product also saw a 6% month-on-month and a 43% year-to-date increase in volumes. Japanese Yen futures also showed a substantial year-to-date rise of 61% to reach 16,840 contracts.
In January this year, Forex Magnates spoke to DGCX CEO, Gary Anderson, in order to ascertain the venue's plans for the Indian Rupee contract, and if it was seeking to deviate from this as a mainstay of its business. Mr. Anderson at the time explained that, "The DGCX Indian Rupee Futures contract is increasingly appealing to a range of institutions that consume Indian Rupee Liquidity , not just in the Middle East but also in international markets."
"The product has been attracting growing attention from international institutional participants, ranging from multinational banks, non-deliverable forward (NDF) markets, traders and other business entities. Building on this success, DGCX is exploring the introduction of new futures contracts in Emerging Market (EM) currencies," stated Mr. Anderson at the time.
Almost a year on, the DGCX has experienced continual expansion in volumes for this particular contract, which in June this year achieved a 70% year-on-year increase.
Evolution Of Technology
Despite being a region not synonymous with leading edge FX institutions, the DGCX this year has demonstrated its intention to pioneer the alignment of its venue with those in other regions in which institutional FX is commonplace, by becoming the first central counterparty in the Middle East by joining Euroclear, despite the absence of regulatory requirements stipulating this in the region, perhaps alluding to the venue's intention to attract an intercontinental audience.
In a corporate statement detailing the announcement of November's volumes, Mr. Anderson today explained that: “With the heightened volatility seen in Emerging Market economies, it is critical that the Middle East’s business community has access to secure exchange-traded contracts to manage currency and commodity risk. This is particularly critical for regional businesses that have strong trade and investment links with large emerging markets."
"The continued volume growth of Indian Rupee futures and SENSEX futures is testimony to the Risk Management and investment benefits our Emerging Markets (EM) products offer to a range of institutions. We continue to engage with regional and international markets to explore new Emerging Market products, and are well positioned to develop a strong offshore trading platform for such contracts," he concluded.
