Fresh from launching this month, the Dubai Mercantile Exchange, or DME, could launch an initial public offering if its Middle East crude oil futures contract is a success. The exchange is also looking at consolidating regional commodities futures activity.

«I would see our exchange to be quite a large. company shortly, once the crude contract takes off» and a planned jet fuel contract comes on line, DME Chairman Ahmad Sharaf told Dow Jones Newswires in an interview Monday.
Asked if the exchange was considering listing shares on a stock exchange, Sharaf said «the board has discussed it,» but declined to say more on the topic.

The DME is the latest in a long line of attempts to launch a benchmark Middle East sour crude futures contract, and its owners are hoping the decision of both the Oman and Dubai governments to price their oil production off the new futures will bring success where others failed.

Sharaf said that the exchange's first week volume exceeded expectations and that he is confident of success.

He declined to give any estimation of future earnings or growth projections for the new exchange, which is jointly owned by the Dubai and Oman governments and Nymex Holdings Inc., owner of the New York Mercantile Exchange. The exchange started trading Oman sour crude futures on June 1.

The Dubai exchange, which is a wholly electronic bourse, also sees the chance to be a major player in consolidating the region's commodity and energy exchange activity, especially due to the liquidity provided by Nymex. Sharaf said that, in the next three months, he hopes to talk to energy producers in the region that are looking at futures contracts.

«We are looking at opportunities by which we can leverage products that other countries can do .we could help do that if we have a marketplace here,» Sharaf said. «You're not going to be able to create two or three market places around similar products.



Sharaf said the exchange hopes to launch a jet fuel future contract this year and has started preliminary discussions on instituting a liquefied natural gas, or LNG, futures. This comes as a new exchange readies to launch in Qatar. Qatar recently overtook Indonesia as the world's biggest LNG exporter, according to the U.S. Energy Information Administration.

«At some point it would be appropriate for us to have a discussion» with Qatar's planned International Mercantile Exchange, Sharaf said.
The Dubai exchange is also considering other commodities outside energy. «We will also look at some of the other contracts, metals, whether it's aluminum, gold, silver and so on,» Sharaf said.

The Oman crude contract had modest volumes in its first week, with 6,250 contracts traded on the busiest day, which was Thursday. That compares with volumes of more than 200,000 in IntercontinentalExchange Inc.'s Brent crude, the European benchmark. DME is also offering spread contracts, giving traders the chance to trade on the price difference between Oman crude and European and U.S. benchmarks.

Sharaf said that about half the DME's volumes have been traded during U.S. business hours, with activity during Asian hours being slower than in the U.S. and Europe. Singapore traders are considered important for the success of the contract, with a large proportion of Middle East crude exports sent to Asia.

«We know the trading culture in Asia and we were expecting this _ Nymex has seen that Asia tends to follow as liquidity builds in Europe and the U.S.,» Sharaf said. «We're going to work very aggressively with the traders in Asia to get them comfortable with the contract» with roadshows and possibly training courses, he added.