(MENAFN- Khaleej Times) Nasdaq Dubai on Sunday launched equity index futures for the main indices of Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX), a move expected to give a breakthrough for investors in Middle East capital markets.
The share index contracts offer new way to gain from performance of leading listed companies.
In Dubai, DFM chairman Essa Kazim and Nasdaq Dubai chairman Abdul Wahed Al Fahim rang the market-opening bell to celebrate the launch of futures linked to the DFM's General Index.
In Abu Dhabi, ADX CEO Rashed Al Blooshi and Nasdaq Dubai CEO Hamed Ali rang the ADX market opening bell to welcome the launch of futures trading on the ADI.
The share index contracts are a breakthrough for investors as they provide new tools to track the performance of the DFM, the GCC's second-largest stock market by traded value, and the ADX.
By trading futures contracts on the DFM General Index, investors can for the first time gain exposure to a basket of 37 of some of the Middle East's most prominent companies listed on the DFM, including Emaar Properties, Dubai Islamic Bank and Dubai Investments, without trading either their shares or single stock futures. "The launch of DFM General Index futures is one of the most exciting developments in Dubai's capital markets in recent years and is a key step in DFM and Nasdaq Dubai's joint strategy to offer institutional and individual investors a wider range of products. Index futures further strengthen Dubai's position as an international capital markets hub offering a wide range of opportunities and are likely in particular to attract more foreign investments from large funds seeking hedging and investment solutions," said Kazim.
Futures trading on the ADI will raise the global profile of Abu Dhabi's capital markets and encourage more foreign investment.
"By collaborating with Nasdaq Dubai in the launch of ADI futures, we are encouraging not only investment into the futures themselves, but also into the equities market, as the flexibility provided by futures makes owning shares more appealing to many investors including large international funds. Futures on the ADI provide important support for the ADX's strategic plan 2016-20, which includes diversifying the investor base and increasing market capitalisation," said Al Blooshi.
"This collaboration between Nasdaq Dubai and the ADX is the outcome of the significant synergies that have long existed between us, and we are exploring further product launches and other areas of cooperation. The trading of ADI futures on our market is an important initial step that supports the expansion and development of both Nasdaq Dubai and the ADX to the benefit of regional and international investors. As one of the region's largest stock markets with many leading Middle East companies among its listings, the ADX is an important partner for us," said Ali.
Nasdaq Dubai's futures market opened in September 2016 with single stock futures on eight UAE-listed companies. The market has expanded to include 17 single stock futures and traded value has totalled more than Dh500 million from more than 2.5 million contracts.
Al Fahim said the addition of first index products marks a new phase of expansion for Nasdaq Dubai's futures market, which now offers opportunities for investors to make gains whether the value of the DFM General Index is falling or rising, and make use of leverage to maximise their exposure.
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Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
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