Nasdaq Dubai launches equity futures market

Nasdaq Dubai launches equity futures market

Nasdaq Dubai has on Thursday launched a new equity futures market with 21 contracts on seven of the most actively traded stocks in the United Arab Emirates.

Hamed Ali, chief executive officer of Nasdaq Dubai, told FOW; “This is a pioneering platform in the GCC whose unique advantages of hedging, investment and leverage have the potential to attract a wide range of regional and international participants. Activity is likely to build steadily over time, as more investors and brokers become familiar with equity futures and their utility.”

Nasdaq Dubai Futures has launched with 21 contracts on seven UAE stocks; Aldar Properties, Arabtec Holding, DP World Ltd., Dubai Islamic Bank, Dubai Parks and Resprts, Emaar Properties, and Emirates Telecommunications Group.

The single stock futures - which trade on the X-Stream trading platform - are settled through cash, instead of physical delivery of the underlying equity, and each equity futures contract gives exposure to 100 underlying shares. The settlement of price differences takes place in cash.

Following the launch, Nasdaq Dubai will now turn its attention to building geographical growth, both regionally and internationally, as well as product expansion.

The new exchange is supported by a raft of brokers and market makers, including Al Ramz Capital, Arqaam Capital, EFG Hermes, Integrated Securities, MenaCorp, Mubasher Financial Services and Shuaa Capital.

Nasdaq has also worked with vendors FIS, DirectFN, ZagTrader, and First Information Technology as its technology partners for the exchange.

“The launch of the market is a result of partnership and collaboration between the exchange and the launch partners. This partnership with the market leaders has enabled us to tune the market and its products toward the demand that currently exists for new products, and to extend its reach to the right investors who now have a new investment tool,” a spokesperson told FOW.

Nasdaq Dubai is not the first exchange in the Middle East to look to equity futures for product diversification.

As reported by FOW earlier this year the Dubai Gold and Commodities Exchange (DGCX) launched a suite of single stock futures contracts – its first equity futures – to provide access to Indian and US stocks, including Facebook, Google, JP Morgan, Apple, Ifosys and Tata Motors.

The Dubai exchange said in June that it plans to treble the number of single stock futures contracts it offers by the end of 2016 to 45.

In November FOW is hosting its Trading GCC event at the Sheraton Grand Hotel in Dubai, in partnership with Nasdaq Dubai.

The event will bring together more than 200 delegates from Dubai and across the GCC region to showcase derivatives trading opportunities for local market participants, look at how to increase participation from both domestic and international players and discuss how developments in market infrastructure and technology can encourage growth.

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