The Hindu Business Line : Dubai investment body, NYMEX in pact for commodity exchange

THE Dubai Development and Investment Authority (DDIA) today announced a memorandum of understanding (MoU) with the New York Mercantile Exchange (NYMEX) to jointly explore the development of the Dubai Mercantile Exchange (DME), the region's first commodity futures exchange.

Mr Mohammed Al Gergawi, Chairman of the Board of DDIA, said the pact will strengthen Dubai's ties with the international finance and commodities trading community, attract FDI, leverage the modern infrastructure which is responsible for making Dubai the region's premiere trading hub, and transfer risk management skills to the region, according to a statement made available to Business Line.

Mr Gergawi pointed out that every major trading hub worldwide has developed a commodity exchange except for the West Asia , which is home to 65 per cent of the world's crude oil and 40 per cent of the world's natural gas reserves.

Commenting on the role of DME for the region, Mr Vincent Viola, Chairman of NYMEX, said: "The DME will enable the region to become a serious player in the world's energy and commodities markets, creating greater efficiency and providing a mechanism for managing risk in a regulated and well structured trading environment."

The joint study will focus on the creation of new and differentiated products, primarily revolving around commodities such as crude oil, natural gas, electricity futures and metals such as aluminium and gold. The NYMEX President, Mr J. Robert Collins, said that given the importance of West Asia the Middle East in the oil & gas world, the DME is expected to greatly enhance the sophistication of the local and regional players, and attract business to Dubai's already booming economy.

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