DME chief steps down as ownership change is set

Thomas Leaver, the chief executive of the Dubai Mercantile Exchange (DME), has resigned after four years in charge, the bourse announced yesterday.

His departure comes after the Chicago Mercantile Exchange (CME), the world's largest commodities trading platform, raised its stake in the DME to become majority shareholder. The recapitalisation was completed last month.

"The recapitalisation is done, the company is extremely well funded, we've got volumes going up - it's a great time to step aside and let someone else carry the baton for the next distance," said Mr Leaver.

He denied that the new ownership was a reason for his departure. Mr Leaver will remain chief executive until a replacement is appointed. The exchange has started the search for a successor, and a transition committee has been put in place to oversee his departure.

"We didn't want to go public until we are well and truly into the process of succession," said Mr Leaver. The next chief executive will not come from the CME or any of the other shareholders, he added.

In the recapitalisation, the Oman Investment Fund increased its stake in the DME to 29 per cent, while state-owned Dubai Holding was reduced to a minority shareholder with 9 per cent. A range of strategic investors including Shell, Vitol and Goldman Sachs hold the remaining 12 per cent.

During Mr Leaver's tenure, the DME strove to become the benchmark for crude oil traded out of the Gulf. It compensated for the decline of Dubai's crude production by basing its prices on the trade of Oman's 900,000 barrel per day output. The DME's Oman crude oil futures are linked to the heavier, sour crude of the sultanate, rather than to the lighter, sweeter varieties represented by Nymex's West Texas Intermediate crude oil and Brent crude oil traded on the ICE exchange.

To become a benchmark for the so-called East of Suez trade, the DME has to displace the pricing service offered by Platts as the main reference for futures prices.

Last year, about 145 million barrels of crude were traded via DME, a year-on-year increase in trading volumes of 19 per cent. On average, about 3,500 contracts were traded every day.

In February of this year, the exchange traded more than 100,000 contracts for the first time - about 25 per cent of the Arabian crude exported to Asia.

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