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65056
Wed, 06/10/2009 - 13:32
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https://oananews.org//node/65056
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DGCX delays launch of plastics futures
The Dubai Gold and Commodities Exchange (DGCX) will wait until it receives encouraging feedback from the region's plastics industry to launch its long awaited plastics futures contracts, the exchange's CEO said according to a report in Emirates Business 24|7.
"Plastics are a niche segment and the overall surge in commodity volumes may not correspond to participants' interest in plastics. The launch of the DGCX plastic futures contracts will be based on industry readiness and positive feedback," Malcolm Wall Morris said in an e-mailed statement.
Investors in Dubai have been speculating that DGCX may launch the plastics contract sooner than expected considering the recent surge in the commodities. Total volume on DGCX reached a record 158,074 contracts in May – the highest monthly volume achieved in 2009.
"With an underlying value of $7.5 billion (Dh27.5bn), May volumes reflect a year-on-year increase of 77 per cent. The volume exceeded the previous high of 101,215 contracts achieved in March and was mainly driven by renewed interest in DGCX Gold, WTI and Indian Rupee/Dollar futures contracts. The year-on-year growth in average daily volume was 85 per cent," DGCX said in a statement.
Commodities trading on global scale has also been equally good. According to Greenwich Associates, a US-based financial consultancy, an increasing number of companies across the world are hedging their commodities exposure now.
Rising sentiment had made commodities traders in the UAE to conclude that the contract may be launched sometime soon.
However, DGCX said plastics stands in a different segment of the commodities market and the same sentiment can be applied to it.
"DGCX decided to postpone the introduction of plastics futures contracts following requests from industry players to defer the launch given the current economic climate. Although the products were ready and DGCX was on track to launch them – the plastics industry required more time to prepare for trading," Morris said.
Almost 80 per cent of DGCX volumes originate from the Middle East and the Indian Subcontinent, the balance being taken up by participants from US and Europe. DGCX currently offers futures in steel rebars, gold, crude oil, silver and currencies.
The underlying asset for the plastics futures that DGCX plans to launch is polypropylene. It will have two trading symbols; DPPM (polypropylene – Middle East) and DPPS (polypropylene – South East Asia).
The Middle East's plastics market is estimated to be about $170bn. –
"Plastics are a niche segment and the overall surge in commodity volumes may not correspond to participants' interest in plastics. The launch of the DGCX plastic futures contracts will be based on industry readiness and positive feedback," Malcolm Wall Morris said in an e-mailed statement.
Investors in Dubai have been speculating that DGCX may launch the plastics contract sooner than expected considering the recent surge in the commodities. Total volume on DGCX reached a record 158,074 contracts in May – the highest monthly volume achieved in 2009.
"With an underlying value of $7.5 billion (Dh27.5bn), May volumes reflect a year-on-year increase of 77 per cent. The volume exceeded the previous high of 101,215 contracts achieved in March and was mainly driven by renewed interest in DGCX Gold, WTI and Indian Rupee/Dollar futures contracts. The year-on-year growth in average daily volume was 85 per cent," DGCX said in a statement.
Commodities trading on global scale has also been equally good. According to Greenwich Associates, a US-based financial consultancy, an increasing number of companies across the world are hedging their commodities exposure now.
Rising sentiment had made commodities traders in the UAE to conclude that the contract may be launched sometime soon.
However, DGCX said plastics stands in a different segment of the commodities market and the same sentiment can be applied to it.
"DGCX decided to postpone the introduction of plastics futures contracts following requests from industry players to defer the launch given the current economic climate. Although the products were ready and DGCX was on track to launch them – the plastics industry required more time to prepare for trading," Morris said.
Almost 80 per cent of DGCX volumes originate from the Middle East and the Indian Subcontinent, the balance being taken up by participants from US and Europe. DGCX currently offers futures in steel rebars, gold, crude oil, silver and currencies.
The underlying asset for the plastics futures that DGCX plans to launch is polypropylene. It will have two trading symbols; DPPM (polypropylene – Middle East) and DPPS (polypropylene – South East Asia).
The Middle East's plastics market is estimated to be about $170bn. –
