CME, Oman Fund Raise DME Stake

Futures exchange operator CME Group 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.

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 CEO Thomas Leaver told reporters on a conference call.

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

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

“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 US 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 per cent, according to the statement.