Goldman Sachs (GS) and
Morgan Stanley (MS), along with four energy trading firms, have bought equity interests in the Dubai Mercantile Exchange.
The two financial institutions, alongside energy companies Vitol, Concord Energy, Casa Energy Trading and a
Shell (RDS.A) company, invested in the exchange. The DME's board had approved the release of an indirect equity stake of up to 20% in the exchange. Terms of the investments announced Monday, however, were not disclosed.
The DME was formed last year as a joint venture between the New York Mercantile Exchange, Tatweer, a member of Dubai Holding and the Oman Investment Fund.
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"The Dubai Mercantile Exchange not only offers strong potential from an investment perspective, but also constitutes a strategic partnership that will develop our footprint in the Middle East," said Georges Makhoul, president of Morgan Stanley MENA, in a statement Monday.
"A successful and liquid futures exchange linked to energy products in the region will help us to better manage some of the risks inherent in our own business and those of our clients," said Goran Trapp, Morgan Stanley's head of commodities for EMEA. "We believe that the ongoing economic growth and development in Dubai and wider GCC region will continue to drive the success of the DME, delivering return on investment as well as enhanced opportunities for our global client base."
The exchange lists the DME Oman Crude Oil Future Contract, its flagship Middle East sour crude oil futures contract; as well as its recently launched DME Brent Crude Oil Financial Contract and the DME Oman Crude Oil Financial Contract. More than 400 million barrels of crude oil have been traded on the DME, according to the exchange.
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