CME’s Middle East trading volumes jump as hedge funds rush to Dubai and Abu Dhabi

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CME Group says an influx of hedge funds to the United Arab Emirates has spurred double-digit growth in its trading volumes coming from the Middle East, as international traders flock to Dubai and Abu Dhabi.

The world’s biggest derivatives exchange told the Financial Times that average daily volumes from the region have jumped 16 per cent this year so far to 193,000 trades or contracts, as trading by hedge funds rose about 30 per cent.

The jump in hedge fund activity was “pretty consequential” for CME, helping to make the Middle East “our fastest growing segment by far,” Julie Winkler, CME’s chief commercial officer, said in an interview.

While the Middle East still accounts for a relatively small portion of CME’s volumes with a “single-digit percentage” share, this is similar to Hong Kong and the exchange is positioning itself to benefit from the success of efforts by Dubai and Abu Dhabi to attract international traders.

New York-headquartered Davidson Kempner, which manages $37bn, opened an office in Abu Dhabi on Tuesday, joining several high-profile hedge funds that have operations in the UAE’s oil rich capital, including Marshall Wace and Brevan Howard, which has more than 100 staff based there.

CME — which owns 33 per cent of Dubai-based Gulf Mercantile Exchange — is also establishing a physical presence in the Middle East’s commercial hub by placing a business development officer who will initially be based in GME’s office, Winkler said.

Hedge funds and asset managers are setting up offices in the region to be closer to its deep-pocketed sovereign wealth funds because they believe that will improve access to deals rather than flying staff in from other cities.

The Dubai International Financial Centre, which positions itself as a financial hub between east and west, said in July it hosted at least 85 hedge funds, a 72 per cent increase over the previous 12 months, adding that 69 of them managed at least $1bn. Neighbouring Abu Dhabi Global Market does not disclose the number of hedge funds it hosts.

Winkler said that the UAE’s favourable tax regime, lifestyle promise and a timezone spanning Asian, European and US markets have attracted traders keen to tap the region’s capital pool.

“They’re wanting to build out those operations to a level that is pretty significant . . . We’re seeing complete pods of some of these hedge funds moving to the region.” 

Winkler said CME was guided by “where our customers are positioning themselves” when choosing which regional financial centres to set up in. “Both the asset management and the hedge funds flowing into Dubai were critical,” she said.

CME’s shares have risen 17 per cent in 2025 so far, as it benefited from global market volatility, putting it ahead of a 6.3 per cent gain for Intercontinental Exchange and Nasdaq Inc’s 15 per cent rise.