DMCC Tradeflow launches electronic Commodity Murabaha trading platform

Dubai: Dubai Multi Commodities Centre (DMCC), a Government of Dubai Authority, on Wednesday announced the inaugural Commodity Murabaha transaction on its DMCC Tradeflow platform.

The transaction, which used assets from Ducab and Enoc, took place between Noor Islamic Bank and Commercial Bank of Dubai, marking the official launch of the DMCC Tradeflow Islamic product portfolio.

“The growth of the global Islamic finance industry, combined with the recent announcement of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai’s vision for the Emirate becoming a global hub for Islamic finance and economy, has further highlighted the need for innovative and relevant sharia-compliant financial infrastructure,” said Ahmad Bin Sulayem, Executive Chairman, DMCC.

DMCC Tradeflow pioneered the use of an electronic central registry of commodity ownership in Dubai and the inaugural Commodity Murabaha transaction using the platform marks an important milestone within the Islamic Finance industry, further cementing Dubai’s role as a global commodity trading hub.

Commodity Murabaha enables Islamic banks to manage liquidity by selling physical commodities at an agreed profit over a deferred payment period. After receiving title and possession to the commodities, the bank’s customers can sell the commodities in the open market to realise their monetary value.

“The opportunity to be part in this pioneering initiative is very much in line with our corporate culture of innovation. The fully electronic mechanism that adheres to Sharia principles provides us with the transparency and speed of execution required to better serve our customers,” said Hussain Al Qemzi, Group CEO of Noor Investment Group and CEO of Noor Islamic Bank.

Real commodities, real trade and real sharia compliance are the key foundations that underpin DMCC Tradeflow. Islamic banks in the GCC have for some time been seeking a regional solution that allows them to conduct business in their home markets and DMCC Tradeflow has been specifically developed to meet this need.

“This platform creates a wider range of treasury products available in the market to help stimulate liquidity in the region. It provides a solution to both the conventional and Islamic financial institutions and we are extremely pleased to be taking a lead on this,” said ohn Tuke, DGM, Treasury & ALM, Commercial Bank of Dubai.

The commodities available on DMCC Tradeflow include oil products, foodstuffs and base metals and if required these goods can be inspected easily by sharia scholars, helping to provide comfort and transparency regarding the goods traded.