WGC-Sponsored Gold ETF Launched in Dubai
Source: Mineweb, Luke Pachymuthu (3/2/09)
"The awaited Sharia compliant gold ETF has been launched in Dubai and will be traded on the NASDAQ Dubai exchange, with gold backing being held by HSBC."
Dubai gold securities, the first exchange traded commodity (ETC) complying with sharia law, are aimed at the increasingly popular Islamic finance market.
The securities were launched at an event in Dubai involving the World Gold Council (WGC), NASDAQ Dubai and the Dubai Multi Commodities Centre (DMCC).
"Dubai gold securities will establish a benchmark for investors looking for innovative solutions to invest in commodities within the framework of Islamic finance," DMCC Executive Chairman Ahmed bin Sulayem said.
Each security, called "Dubai Gold," is 100% backed by physical, allocated gold held in safe-keeping by an independent custodian, HSBC (HSBA.L), the DMCC said in a statement. One share represents one-tenth of an ounce of physical gold.
HSBC will act as the primary market maker of the gold securities, which will be listed on NASDAQ Dubai.
The securities will be marketed by DMCC unit Dubai Commodities Asset Management, it said.
The WGC has long planned the launch of a gold ETF in Dubai, and had hoped to start it before the end of last year. The WGC is a trade group funded by gold mining companies to promote the precious metal.
Dubai has a long-established market for gold bullion and jewellery fuelled by strong demand from the Arab world and India. Dubai also hosts gold futures trading at the Dubai Gold and Commodities Exchange.