Despite the lull in summer trading, Nasdaq Dubai recorded an 80 per cent rise in equity trading volume in August, with turnover soaring to 175 million shares from the 97 million in the corresponding period of 2008.

The increase followed a year-on-year monthly volume rise of 110 per cent in June and 32 per cent in July this year, with actual trading volumes being 190 million and 128 million shares in the two months respectively.

In the first eight months of this year, Nasdaq Dubai recorded trading volumes of 2.06 billion shares, showing a growth of 71 per cent when compared to the 1.2 billion shares reported in the corresponding period of 2008.

A Nasdaq Dubai spokesman said: "Though summer is traditionally a slow period, we have seen healthy equity volumes from international as well as individual UAE investors, as confidence in the equity markets has partially revived." The exchange introduced mandatory reporting of all over-the-counter equity trades in September 2008. Equity derivatives trading volumes grew last month to a monthly record of 12,115 futures contracts, up 37 per cent from the 8,845 recorded in July. About 55,307 futures contracts have been traded since Nasdaq Dubai launched its equity derivatives market in November 2008.

Equity futures are listed for 21 individual UAE companies and for the FTSE Nasdaq Dubai UAE-20 share index, which was designed as a hedging and investment mechanism for GCC and international investors. The index rose 54 per cent from end-2008 to end-August 2009.

"Our derivatives market continues to expand as interest grows in the hedging opportunities offered by the FTSE Nasdaq Dubai UAE-20 index and our individual stock futures," said the spokesman.

Meanwhile, a total of 371 Dubai gold securities (DGS) traded in August, down 87 per cent from 2,888 in July. Since listing in March 2009, about 27,641 DGS have traded on the exchange until the end of August.

Sajith Kumar PK, Chief Executive Officer of JRG Metals and Commodities, DMCC, told Emirates Business: "This is purely because of the holiday season. Many investors and fund managers were on vacation, hence there was a drop in volumes. However, gold prices in spot and futures are moving up on speculative demand, which is likely to last for a short term only. China is buying gold in good quantities to add to its reserves and the ensuing festive season in India is boosting demand. The prices will stabilise soon."

Sameer Meralli, Managing Director, Dubai Commodity Asset Management, said: "Given that Dubai gold securities are priced off the spot price of gold, some investors have sought to play a tactical bet on the price outperformance of the asset compared to its historical trading levels. Momentum traders have been citing inflationary concerns in the global economy as an impetus to take long positions in gold."

Interestingly, Nasdaq Dubai witnessed a surge in trading of DGS yesterday, with about 4,000 securities traded on the bourse.

"There has been renewed attention towards gold as a result of the recent price movements beyond the emotional $1,000 hurdle. This renewed interest has been somewhat channelled towards DGS as investors view the securities as a proxy for investment gold," said Meralli.

"Being the only physically exchange-traded product in the region, it is reassuring to see investors become familiar with the product as a means to access the gold trade in a fully-collateralised manner. Since the product launched, we have witnessed volumes increase by more than 300 per cent, again reflecting the demand for such a product in the region," added Meralli.