CME, Oman fund to raise stake in Dubai Commodities Bourse

CME, Oman fund to raise stake in Dubai Commodities Bourse

Futures exchange operator CME Group Inc. and an Omani sovereign fund boosted their stake in the Dubai Mercantile Exchange after a cash infusion on Tuesday, diluting positions held by oil majors and the ruler of Dubai's investment vehicle.

February 21, 2012 4:15 by Reuters

Both the CME and Oman Investment Fund injected an undisclosed amount into a recapitalization of the DME, which trades the Oman oil futures contract.

“The fresh funds came from CME and OIF. The other strategic investors were diluted as part of the infusion,” DME Chief Executive Thomas Leaver told reporters on a conference call.

After the injection, CME’s stake in DME will rise to 50 percent from 25 percent while Oman Investment Fund’s holding goes to 29 percent from 25 percent.

Dubai Holding, owned by Sheikh Mohammed bin Rashid al-Maktoum, will see its 25-percent stake reduced to 9 percent.

“Dubai Holding was diluted … it wasn’t a buyout but just a dilution of shares,” Leaver said.

The three firms set up the DME in 2007 as a joint venture along with oil and financial firms like Shell, Vitol , Goldman Sachs and JPMorgan.

The DME has long aimed for its Oman contract to challenge Brent and U.S. crude futures as a global benchmark but so far that has not happened.

In 2011, the DME delivered more than 145 million barrels of crude oil – a year-on-year trading volume growth of 19 percent, according to the statement.