Dubai Gold Securities (stock ticker: GOLD), an initiative of World Gold Council (WGC) and the Dubai Multi Commodities Centre (DMCC), began trading on NASDAQ Dubai Ltd. today. Dubai Gold Securities represent the first Exchange Traded Commodity (ETC) to list on NASDAQ Dubai and the first Shariah-compliant gold ETC in the region.
Dubai Gold Securities offer investors simple, secure and Shariah-compliant access to gold bullion investment without the additional costs normally associated with insuring, storing and transacting in physical gold. Each security is 100% backed by physical allocated gold held in safekeeping by an independent custodian. One share represents an initial interest of one-tenth of a fine troy ounce of allocated gold bullion.
Gold is widely-accepted by the investment community as an important portfolio diversifier and preserver of wealth. It is a proven hedge against inflation and the U.S dollar.
Dubai Gold Securities will be marketed in the UAE by Dubai Commodity Asset Management, a wholly-owned subsidiary of the DMCC that is licensed by the UAE Central Bank, and which develops and distributes commodity-linked investment products.
HSBC Bank PLC will act as the primary market maker for Dubai Gold Securities. Investors can trade in Dubai Gold Securities through registered NASDAQ Dubai brokers.
Dubai Gold Securities comply with Shariah law and practice. A Shariah Supervisory Board has been constituted to supervise the issuance of Dubai Gold Securities and will conduct regular physical inspections of the gold held on behalf of investors.
Integral to Dubai Gold Securities’ compliance with Shariah law is the fact that each security is fully backed by an identifiable amount of allocated gold held by the Custodian, HSBC Bank USA, N.A., at its London vault premises. The gold will be held in an allocated account on behalf of securities holders. The Custodian also plans to appoint a sub-custodian with vaults in Dubai.
Aram Shishmanian, Chief Executive Officer of World Gold Council, a partner in the initiative, said: “It is the long term mission of the World Gold Council to remove the barriers to investing in gold across the globe. As financial turmoil continues all over the world, investors are wondering where their money will be safe. Gold has represented an important currency for thousands of years and it is a major store of value for governments, institutions and individuals alike. As a physical asset, gold is no one’s liability and is not exposed to financial market or corporate failures. Having an allocation to gold is like an insurance policy, gold’s value as an asset becomes most obvious when it is most needed. With future inflation looming, gold’s ability to preserve wealth will become key.”
Ahmed Bin Sulayem, Executive Chairman of the DMCC said: “As the first Shariah-compliant gold ETC, Dubai Gold Securities will establish a benchmark for investors looking for innovative solutions to invest in commodities within the framework of Islamic finance. Dubai Gold Securities will increase transparency in Dubai’s gold markets and will give a significant boost to the Emirate’s position as a leading financial centre of innovation. We are glad that Dubai Gold Securities will offer all investors in this region an easy, efficient and reliable way to invest in gold,”
Jeff Singer, Chief Executive Officer of NASDAQ Dubai said: “NASDAQ Dubai is an established platform for Shariah products and is delighted to welcome its first Shariah-compliant gold securities. Dubai Gold Securities can be bought and sold on NASDAQ Dubai just like shares, through a regional or international broker.”
The listing on Nasdaq Dubai follows the successful listing of similar bullion securities products on a number of stock exchanges around the world, including the NYSE Arca and London Stock Exchange. Dubai Gold Securities are an integral part of the Exchange Traded Gold family of products established as a result of an initiative by the World Gold Council. The value of gold held by products in World Gold Council-backed gold ETFs, as of 23 February, 2009, stood in excess of US$38 billion, equivalent to 1202 tonnes of gold.
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