Dubai’s DGCX Plans to Offer Plastics, Renminbi Futures Contracts

Dubai Gold & Commodities Exchange, the Middle East’s first derivatives market, plans to offer futures contracts based on polypropylene and the renminbi as it seeks to tap into growing trade with China.

The deliverable plastics contracts, to be denominated in dollars, are being developed in partnership with China’s Dalian Commodity Exchange and are expected to begin trading in the third quarter, Chief Executive Officer Gary Anderson said at a news conference in Dubai today. The six-nation Gulf Cooperation Council, which includes oil-rich Saudi Arabia and the United Arab Emirates, produce more than 20 percent of the world’s plastics and a majority of that flows into China, he said.

The exchange aims to focus on contracts needed within the region, Anderson said. The plastics contract will trade alongside a renminbi futures contract to enable users to hedge their exposure to the currency, he said.

State-controlled DGCX, established in 2005, already offers futures contracts in metals, currencies and energy. Contracts valued at $48.5 billion traded on DGCX in May with volume jumping 70 percent from a year ago, the exchange said June 9.

DGCX will begin trading a futures contract based on the Bombay Stock Exchange’s S&P BSE Sensex Index from July 5, Anderson said. The contract is its first equity product and will give some 6 million Indians living in the Gulf, access to country’s equity market, he said.

The bourse, a venture between the Dubai Multi Commodities Center, Financial Technologies India Ltd. and the Multi Commodity Exchange of India Ltd., also plans to offer future contracts on other stock indexes in the GCC next year as well as contracts on pulses, cotton and sugar, Anderson said.