The new feature of the contract builds on the exchange’s ambition to provide a crossroads between the African continent and Asia. It hopes this will overcome the drawbacks of the existing forward market, opening it up further to Mauritius-based organizations that have foreign exchange exposure.
With the addition of a delivery-based option, the contract is intended to enable effective hedging of currency risk, as participants would be able to take delivery of the contract value either in US dollars or Mauritian rupees on the expiry date.
Rundheersing Bheenick, Bank of Mauritius governor, says: “I congratulate GBOT on yet another excellent initiative that will help to develop our foreign exchange and derivatives market.
“The outcries of our importers and exporters show their extreme vulnerability to the vagaries of global financial markets.
“With this USDMUR delivery-based contract, GBOT will cater to the currency hedging needs of the export- and import-oriented Mauritian business houses.”
Africa’s newest exchange platform, launched on October 18, 2010, clocked up the highest value of first-day trading by a greenfield exchange with more than $10 million-worth of contracts changing hands.
Clearing is offered by Banque des Mascareignes, Barclays Bank and SBI Mauritius for the contract, which has a specified contract size of $10,000.
“It is our vision to accelerate the development of the Mauritian financial markets by empowering its market participants with unique products that would make Mauritius a global case study for efficient financial risk management,” says Joseph Bosco, MD and CEO of GBOT.
“This is our latest endeavour to ensure that Mauritius-based organizations have financial tools of world-class standards that will enhance their competitiveness in the global business arena.”
The bourse says it tries to develop Africa-centric products in contract sizes suited to the continent’s producers, importers, exporters and investors to enable price discovery in Africa.
Its latest product suite addition follows an earlier announcement this month that MetaQuotes Software had secured independent software vendor status with the exchange.
The firm’s COO Gaies Chreis said that the certification of its MetaTrader 5 trading platform would enable the global broking and trading community to connect to GBOT.
“With interest in the African continent increasing by the day, our members as well as the users of our software will be able to trade African commodities and currencies and other asset classes, such as equities and CFDs, when they are launched for trading on GBOT,” he says.