The growth rate of foreign exchange trading is surging ahead in the Middle East says Deutsche Bank.
The growth of FX trading volumes in the retail FX market in the Middle East has increased significantly since Deutsche Bank launched the Arabic version of its online FX trading service, dbFX, according to the bank.
"The increase in FX trading volumes on dbFX is already exceeding our expectations. We only launched the Arabic version of dbFX, dbfxarabic.com, in October last year and by January 2008 the level of interest from sophisticated investors in the region visiting the website has doubled," says Catherine Hardiman, head of dbFX sales EMEA at Deutsche Bank.
Deutsche Bank’s Currency Return Index, which tracks the performance of a diverse FX investment portfolio, indicates that FX generated higher annualised returns between 1980 and 2006 than either the S&P 500 and the MSCI.
In addition, FX delivered annualised total returns of 11% between 1980 and 2006. The consistent returns of FX compares favourably to total returns for bonds of 9% and 12% for equities over the same period.
"Middle Eastern investors are rapidly discovering the benefits of online FX trading and we expect to see significant growth this year in the region," says Hardiman.
"This change in behaviour coincides with the emergence of FX as a viable alternative asset class for any investment portfolio as it offers consistent returns as well as a means of hedging exposures."