Monday 2 March 2009

Nasdaq Dubai launches gold securities trading today

Nasdaq Dubai will list Dubai Gold Securities under the name of "Dubai Gold" today. Trading will be according to spot gold prices.

According to a note by MAC Capital Advisors, each gold security will represent ownership of a 10th of an ounce of gold. Gold is stored on behalf of investors by HSBC, for a fee of 0.4 per cent per year.

"Initially, a creation basket of 50,000 shares will be issued. DGSLLP, the issuer, retains the ability to issue up to a billion shares according to market demand. The shares are expected to initially trade at a 10th of the spot gold price in increments of $0.10. Liquidity for Dubai Gold is virtually unlimited as it is backed by the London OTC gold market," the note said.

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