CME Group, the world’s largest and most diverse exchange, and the
Dubai Mercantile Exchange (DME), the premier international energy futures and commodities exchange based in the Middle East, has announced that DME’s contracts will exclusively trade electronically on the CME Globex® platform in the first quarter of 2009, subject to final DME board approval of the definitive agreement.
The CME Globex platform offers virtually around the clock access to the broadest array of derivatives products in every major asset class in more than 85 countries and foreign territories worldwide.
The transition of the
DME Oman Crude Oil Futures Contract (OQ) to CME Globex enables the world’s three crude oil benchmark products to trade on the same platform.
Commenting on the arrangement, DME said "The DME Oman Crude Oil Futures Contract is increasingly recognized as the first successful exchange traded contract for price transparency in the East of Suez markets, joining West Texas Intermediate (WTI) and Brent crude oil futures contracts as the world’s benchmarks for crude oil. As growing demand from Asia continues to drive fundamentals in the oil industry, there is increasing need for a transparent mechanism to determine the price of crude imported into the region."
Ahmad Sharaf, Chairman of the DME, said: “We are delighted to announce that J.P. Morgan has joined the DME as the latest strategic investor in the Exchange. Continued interest from the ranks of the most highly respected global financial institutions and energy trading firms to take an equity stake in the business underscores the success of the DME to date. Furthermore, it affirms the strong future prospects for the Exchange, the broader Middle East, and Dubai in particular, which has emerged as an important financial hub and energy trading centre.”
DME said the listing of the DME Oman Crude Oil Futures Contract and the DME Oman Crude Oil Financial Contract (ZG) on CME Globex would further increase opportunities for improved risk management by Asian refiners through sophisticated hedging strategies, as well as create arbitrage opportunities and other advanced trading strategies for the trading community around the world.
“The addition of DME’s contracts onto CME Globex extends the wide range of energy products available to our global customer base and further strengthens our links with the Middle East, following the confirmation of CME Group as a ‘Recognized Body’ by the Dubai Financial Services Authority,” said CME Group Executive Chairman
Terry Duffy.
“This agreement is another example of our commitment to expand our global offerings and services to our customers worldwide.”
Ahmad Sharaf, Chairman, DME, said: “This partnership demonstrates a significant step forward in the DME’s development as the leading commodities exchange in the Middle East and is in line with the vision of UAE Vice President, Prime Minister and Ruler of Dubai, Sheikh Mohammed bin Rashid al Maktoum in establishing Dubai as a leading international financial centre. We intend to work closely with our partners the CME Group as they expand their international footprint, and we are confident that this cooperation will help to build global visibility for the DME Oman Crude Oil Futures Contract through the around the clock availability of the CME Globex trading platform.”
“We are pleased to integrate the DME’s contracts into the global CME Group product set and extend access to customers in more than 85 countries via CME Globex,” said
Craig Donohue, CME Group CEO.
“The growing stature of the DME Oman Crude Oil Futures Contract, particularly in the Far East, makes it an attractive addition for CME Group customers wishing to augment their existing trading strategies. In turn, energy market participants in the Middle and Far East will gain access to a worldwide pool of liquidity through CME Globex.”
Thomas Leaver, CEO, DME, said: “The transition to CME Globex marks an important milestone in this second phase of growth for the DME. In the first year of trading we saw over 400 million barrels traded through the DME, and recently released an equity stake to some of the world’s leading financial and physical oil companies, marking their confidence in the DME’s long term success and ability to weather current market turmoil. The visibility and reach offered by CME Globex will give further impetus to the growing liquidity of the DME contracts, and we are confident that this is a strong first step in a long and productive partnership with the CME Group.”
CME Group completed its acquisition of NYMEX Holdings on August 22, 2008, creating a market with a pro forma 2007 average trading volume of approximately 14.2 million contracts per day in the first two quarters of 2008.
Customers from more than 85 countries trade CME Group products, primarily electronically. CME Group, through its acquisition of NYMEX Holdings, holds a 25 percent equity stake in DME, alongside core shareholders
Tatweer, a Dubai Holding company, and the
Oman Investment Fund. A strategic investor group including leading global financial institutions and energy trading firms such as Goldman Sachs, Morgan Stanley, J.P. Morgan, Vitol and Shell, holds a 20 per cent equity stake in the DME.
The arrangement remains subject to negotiation of definitive documents and obtaining all necessary regulatory approvals.
