London finance firm sees GCC as Europe-Asia bridge

London-based DKK Partners, an emerging markets foreign exchange liquidity provider, has announced a major expansion into the Middle East.

Four new offices will open in the MENA region as it sees the GCC developing into a “financial hub that bridges Europe with Asia”.

The company, which has its headquarters in Mayfair, has seen its revenues exceed £63 million, up from £3 million the previous year.

It said the record growth has been fuelled by high demand for its services, including FX risk management, access to deep liquidity pools and local collections.

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Dominic Duru, co-founder of DKK Partners, told AGBI: “We see the GCC region more and more becoming the financial hub that bridges Europe with Asia.

“Led by technological fintech innovation as well as progressive regulators, the region has seized the opportunity to position itself in this way.   

“More and more businesses are taking advantage of the fast paced commerce environment.

With the ability to access 70 percent of the global market within seven hours, it makes it ideal for us as an organisation to set up and support these agile companies.” 

The DKK team has increased its headcount from five to 15 full-time staff, with plans for further senior hires and local country managers in the coming months.

DKK, founded in 2020 by capital markets specialist Khalid Talukder, previously of UBS, Citi and Deutsche Bank, and Duru, of RBS and Citi, enables businesses to manage currency risk in frontier markets.

Key services include offering virtual IBAN accounts, allowing customers to unlock access to new territories and currencies, as well as emerging markets liquidity, giving direct access to real-time pricing and execution across market currencies.

Duru said: “GCC currencies are pegged to the US dollar (apart from Kuwait which has a basket but a major weighting given to USD). Companies are looking to hedge their exposure with Euro and Asian currencies.”

He added that currencies that appeal to Gulf investors that differ from the global picture include a “strong move” into the Australian dollar, the New Zealand dollar and the Swedish krona which are “giving good value”.

So what impact are the current global challenges, including rising inflation and interest rates and the ongoing conflict in Ukraine, having on FX trading? 

Duru said the FX industry faces challenges ahead in the absence of historical events that can help model the current climate, which raises difficulties when managing risk.

“With the levels of volatility we are only able to forecast a few days out,” he said. “We anticipate that things will settle down in the fourth quarter of this year, making FX risk management more manageable.”