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June 12 launch for Dubai currency futures |
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6/8/2006 9:38:37 AM |
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DUBAI: Dubai will launch the Middle East’s first currency futures on June 12 to tap growing demand for currency hedging in the region’s trading hub, chief executive of the emirate’s futures exchange said yesterday.
The deliverable euro-dollar, yen-dollar and sterling-dollar contracts will be listed on the Dubai Gold and Commodities Exchange (DGCX), which may introduce more contracts later, Framroze Pochara said.
“Currently a lot of spot trading for currency takes place in Dubai,” he said. “Based on how the market takes to these three contracts, we will think about introducing more currency pairs.” Contracts will mature in September, December, March and June with more than 100 broker members of the DGCX eligible for trading, he said.
The contracts will trade in 5 million yen lots for the yen-dollar, 50,000 euros for the euro-dollar and 50,000 pounds for the sterling-dollar.
The Chicago Mercantile Exchange euro-dollar futures contract trades in 125,000 euro lots.
Pochara said Dubai decided on smaller lots to help create liquidity.
Settlement dates will be T+1 with National Bank of Dubai and HSBC acting as delivery banks.
He said the contracts would target corporate investors as well as treasury operations of banks and investment houses interested in hedging currency risk.
The exchange trades gold and silver futures and is planning to introduce fuel oil and steel contracts in September, Pochara said.
The exchange’s trading day is designed to span the gap in business hours between London and the Far East and it hopes arbitrage traders will boost volumes. — Reuters |
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