The Dubai Gold and Commodities Exchange (DGCX) today announced that it has partnered with Albilad Capital to provide pricing data for the company’s recently launched Shari’ah compliant, gold-backed Exchange Traded Fund (ETF). The ETF, listed on Tadawul, uses data from the DGCX’s Shari’ah Compliant Spot Gold Contract (DGSG) for its benchmark pricing, and is the region’s first physically-backed gold ETF that complies with all Shari’ah requirements in line with Islamic rules and principles. Since its launch at the beginning of the month, Albilad Capital has invested in 780 kilograms of gold valued at $42.67 million.
A minimum of 95% of the ETF’s assets will be invested in physical gold, purchased from the DGCX market via its Shari’ah Compliant Spot Gold Contract, and stored in a secured vault in Dubai. The product is primarily aimed at retail investors.
Les Male, CEO of DGCX, said: “This cross-collaboration between the UAE and Saudi Arabia is a significant milestone in the development of both gold and Islamic finance markets across the region. Historically, there has always been tremendous investor appetite for gold, particularly during times of heightened volatility, but it has not always been accessible to Islamic investment portfolios. But with Albilad Capital’s innovative, Shari’ah compliant instrument that uses reliable and real-time pricing data from the DGCX’s Shari’ah Compliant Spot Gold Contract, investors can more easily own and trade the yellow metal in compliance with Islamic religious law and investment principles. These types of products are increasing in popularity, reflecting the growing potential of the Islamic finance sector. Over the coming months and years, we look forward to fostering more fruitful partnerships that will further build and shape the landscape across the region.”
Zaid Almufarih, CEO of Albilad Capital. Said “Through this partnership with DGCX, we successfully listed the first Commodity physically-backed gold ETF in the Saudi Capital Market. The listing of Albilad Gold ETF added another dimension to the development of the Saudi Capital Market, and further flavored the regional markets with diverse asset classes in compliance with Shari’ah guidelines. This unconventional and innovative product will help all types of investors to have an exposure to gold price movement, and act as an enabler for effective asset allocation in a most efficient manner.”
Sabty Al Sabty, CEO of Riyad Capital, said: “We are proud to be partnering with our clients and counterparties in such ground-breaking and innovative products and of our humble contribution towards enhancing the market infrastructure in the Kingdom for Securities Services in general and ETFs in particular. It not only supports the diversity and the depth of investment products in our market, but also in the wider capital markets. We at Riyad Capital are well positioned for, and look forward to be part of, more such innovative products for the benefit of all capital market stakeholders and the enhancement of the capital markets infrastructure in the Kingdom and our region.”
Mohammed AlBalla, Chairman of Mubasher, said: “We are pleased to add Shari’ah Gold trading to the GTN platform of Mubasher; Gold provides additional investment options for our customers to diversify and optimise their investment portfolios. GTN platform currently offers trading in over 80 markets and multiple asset classes; our objective is to continue to enhance the market and asset class coverage to provide the best investment options for our customers and partners. I want to extend my appreciation to DGCX as our exchange partner for this product and Albilad Capital as our launch customer.”
The DGCX’s Shari’ah Compliant Spot Gold contract, which provides pricing data to Al Bilad’s gold-backed ETF, was launched in 2018 and is the GCC’s first and the world’s only Shari’ah Compliant Spot Gold Contract. The contract has been certified by renowned Shari’ah scholars in compliance with the Shari’ah principles for the ownership of gold.