UAE. CME Group Inc., the world’s largest futures exchange owner, raised it stake in the Dubai Mercantile Exchange as part of a recapitalization arrangement.
CME Group’s Nymex division will increase its stake to 50% from 25%, while Oman Investment Fund will hold 29%, according to a PRNewswire statement released today.
Dubai Mercantile will receive "significant new funds," Chief Executive Officer Thomas Leaver said in a conference call, without providing further financial details.
A unit of Dubai Holding LLC, one of the emirate’s three main holding companies, will retain 9%, while 12% will be held on a non-voting basis by investors including Vitol Group of Cos., Royal Dutch Shell Plc, JPMorgan Chase & Co., Morgan Stanley, Goldman Sachs Group Inc. and Concord Energy Inc.
CME Group offers clearing services for trades done on the Dubai exchange and supports swaps and options contracts that are based on the DME’s main Oman oil futures contract. The DME is seeking to establish the Oman crude futures contract, which gives investors the option to take physical deliveries, as the benchmark for shipments to Asia by interesting more producers in adopting it. The present standard for Middle East crude is the Dubai price assessment.
Leaver has said he is targeting members of the six-nation Gulf Cooperation Council to switch to the Oman contract as a benchmark. The council members are Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Oman and Bahrain.
The exchange, located in the Dubai International Financial Centre, delivered more than 145 million barrels of crude oil in 2011, rising 19% from the previous year, according to today’s statement.