Business | Investment
Forex trade gains ground in Mideast
The growth rate of foreign exchange (FX) trading is surging ahead in the Middle East according to Deutsche Bank, a leading global investment bank and the world's number one in FX trading and services.
- Staff Report
- Published: 00:53 February 20, 2008
Dubai: The growth rate of foreign exchange (FX) trading is surging ahead in the Middle East according to Deutsche Bank, a leading global investment bank and the world's number one in FX trading and services.
FX trading volumes in the retail FX market in the Middle East has increased significantly since Deutsche Bank launched the Arabic version of its online FX trading service, dbFX.
"The increase in FX trading volumes on dbFX is already exceeding our expectations.
"We only launched the Arabic version of dbFX, dbfxarabic.com, in October last year and by January 2008 the level of interest from sophisticated investors in the region visiting the website has doubled," said Catherine Hardiman, head of dbFX sales EMEA at Deutsche Bank.
Foreign exchange trading is becoming an important means of hedging and speculating for the portfolios of family offices and private investors in the region. It offers massive liquidity for investors, with over $3 trillion traded every day, more than 20 times the daily turnover of the New York Stock Exchange.
FX returns also offer very low correlation with bond or equity market returns, lower volatility and superior risk adjusted returns.
"Deutsche Bank's Currency Return Index, which tracks the performance of a diverse FX investment portfolio, indicates that FX generated higher annualised returns between 1980 and 2006 than either the S&P 500 and or the MSCI," she said.
Benefits
FX delivered annualised total returns of 11 per cent between 1980 and 2006. The consistent returns of FX compares favourably to total returns for bonds of nine per cent and 12 per cent for equities over the same period.
"Middle Eastern investors are rapidly discovering the benefits of online FX trading and we expect to see significant growth this year in the region," said Hardiman.
More from Investment
More from Business
Business Editor's choice
-
Do unemployment figures flatter to deceive?
Jobseekers and recruiters give out mixed signals ranging from optimism to downright despair even as official data show recovery
-
Banks can increase their share
Longer opening hours, more locations outside cities and lower charges can help
-
Geepas idea blossomed in Dubai
The journey led from a small shop in Bahrain to a $1.27b company in the UAE
