Friday, Apr 20, 2012
Gulf News
Dubai Investors will be able to trade copper futures in the region for the first time today when contracts go live on the Dubai Gold and Commodities Exchange (DGCX).
The new product, which aims to attract both retail and institutional investors, is sized at five metric tonnes with the price quoted in US dollars.
More than 600,000 tonnes of copper is consumed annually in the Middle East.
DGCX says the copper futures contract has been introduced amid high demand from market participants.
“This contract adds to the opportunities available for investors in the region in diversifying their portfolios away from traditional assets such as equity and real estate,” said Ahmad Bin Sulayem, DGCX’s chairman.
“The technology, the market and the exchange are all ready for copper futures; there is no reason to delay this listing any further. It is the first copper future of its kind in the Middle East and will bring more liquidity to the DGCX,” he added.
More than 12 million contracts worth $550 billion (Dh2.02 trillion) have been traded on the DGCX since the exchange began operations in 2005.
Demand
The Copper Development Association says construction generates about 40 per cent of demand for the metal and the Middle East is set to benefit on that front with numerous infrastructure projects in the pipeline across the region.
“Fluctuating demand from across the world, and its sensitivity to today’s uncertain economic growth prospects, has increased price volatility in copper,” said Samir Shah, DGCX’s chief business officer.
“However, we have chosen a product that we believe will attract retail and institutional investors and will be broadly beneficial to the UAE’s capital markets scene,” he added.
DGCX also said yesterday it had established a Copper Advisory Group comprised of key local market players, including Ducab and Lucky Group, to monitor feedback to the new contract.
By Kevin Scott?Staff Reporter
Gulf News 2012. All rights reserved.
