Currency futures are showing signs of becoming the most attractive alternative asset class in the UAE so far in 2009, led by continued price volatility and a focus on currency risk hedging strategies, said Malcolm Wall Morris, chief executive officer, Dubai Gold & Commodities Exchange (DGCX). “The ongoing volatility in the currency markets will continue to encourage market participants to hedge their exposure to foreign currencies,” he added. “From a long-term perspective, currency futures are especially beneficial to both individuals and commercial entities with investments abroad or those who are planning to invest abroad,” added Wall Morris. Since the start of 2009, 147,000 currency futures contracts have traded on DGCX, valued at $9.4 billion. This compares with 53,000 and $4.6 billion during the same period last year, representing a 104 percent growth in the value of contracts traded for the currencies product range. In addition, currency futures contracts worth $172,000 were settled in the week ending March 20, 2009, demonstrating the growing significance of the exchange in meeting end user's foreign currency requirements. DGCX is the only derivatives exchange in the Gulf region to offer currency futures contracts. Market participants can currently trade futures for a range of currencies including Indian rupee-dollar, euro-dollar, British pound-dollar and Japanese yen-dollar. These contracts offer market participants with an attractive mechanism to hedge their price risk and exposure to foreign currencies. P.Krishnamurthy, CEO Financial Services Division of Dubai International Securities L.L.C., added “we have recently seen increased interest in both the currency and commodity sectors from commercial institutions and private clients in the region. In the current economic climate, market participants are looking for alternative asset classes to diversify their portfolios, increase returns and better manage currency exposures.” DGCX is a fully automated, online commodities exchange. Strategically located in Dubai, the exchange is the first international commodity derivatives marketplace in the time zone between Europe and the Far East. __
