Houston, Texas - February 7, 2006: Addressing the world's leading energy executives and policy makers at the Cambridge Energy Research Associates CERA Week 2006 conference in Houston, Texas today, DME Chief Executive Officer Gary King unveiled the DME's strategic vision and its plans to introduce a new trading hub concept on an electronic trading floor.
The DME will be located in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority. The DME recently announced its intention to implement electronic trading and aims to initially develop and trade a Middle East Sour Crude Oil Futures contract in the heart of the world's largest oil producing region in the fourth quarter of 2006.
In an effort to capitalize on local liquidity, draw regional market participants and attract financial institutions from the Middle East and internationally, the DME unveiled its plans to introduce hubs in its trading facility. The hubs will consist of four to six-seat clusters that will be made available to regional and international financial institutions as well as trading companies. Each hub will contain all the necessary hardware for traders to execute their trades electronically and manage their risk from the Exchange floor. The DME will be the first exchange to introduce this unique hub format.
This will effectively create an energy trading community on the floor of the Exchange, which will not only help to generate liquidity but will further provide the opportunity for international firms to relocate to the floor of the DME, bringing together experienced traders, global banks, local institutions and individuals from around the world.
The DME plans to make further announcements regarding the selection process for firms and individuals interested in obtaining these hubs at a later date.
Addressing participants at CERA Week 2006, Mr. King further discussed the DME's aim to meet the growing market need for price discovery of Middle East sour crude oil. At the same time, the DME would address the time zone gap between Europe and Asia by providing a new center for the trading of energy futures, options and other products. This would enable the energy industry to help its global customers manage risk more effectively. Furthermore, centralized clearing at the NYMEX Clearinghouse will provide additional security for market participants. The NYMEX Clearinghouse is comprised of 39 of the world's largest international banks and financial institutions.
"Against the backdrop of high oil prices, booming regional stock markets and significant liquidity, the DME looks to build upon strong regional confidence and the desire for alternative investment products and risk management," Mr King continued.
"We believe that the Sour Crude Oil Futures contract, which the Exchange seeks to offer, will fulfil these demands as institutions look to diversify into energy and commodities within their investment portfolios. With our unique electronic trading hub concept, international standard regulations and strong demand from our potential customer base, we are confident that the Exchange is poised for success.''
CERA Week 2006 marked the first stop on the DME's international marketing drive to further inform the marketplace of the Exchange's progress to date and the benefits it will bring to a global customer base.
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The Dubai Mercantile Exchange Ltd (DME) Limited's establishment of an exchange inside the Dubai International Finance Centre (DIFC) is subject to regulatory approval from the Dubai Financial Services Authority (DFSA) to be licensed as an Authorised Market Institution to operate inside the DIFC. Furthermore, all clearing and settlement services to be provided by the New York Mercantile Exchange to DME are subject to the New York Mercantile Exchange becoming recognised by the DFSA to operate a remote clearing house in the DIFC and subject to the review and / or approval of the Commodity Futures Trading Commission.
For further information, please contact:
Financial Dynamics:
London: Seán Galvin +44 (0)20 7269 7133
GCC: Laila Danesh +973 17537072
Asia: Julie Wang +852 2293 2257
New York: Scot Hoffman +212 850 5600
