Annual Review 2009 Print

Business Review

In a challenging period for the global financial markets, NASDAQ Dubai achieved notable successes in key areas in 2009. As well as further strengthening its links with regional and international investors, the exchange maintained its track record of expanding trading volumes and capital markets innovation.

Five more brokers became Members during the year, contributing to an increase of nearly one third in reported equity volumes above 2008. The equity derivatives market grew particularly strongly, beginning 2009 as a fledgling platform with almost no activity and ending the year with thousands of trades each week. The importance of this market was recognised with an award for innovation received from FOW magazine.

Although 2009 was a thin year for new listings across the Middle East, NASDAQ Dubai gained three significant new issues. The World Bank and Dubai Multi Commodities Centre jointly listed a Sharia-compliant gold security, the only one of its kind in the region. The International Finance Corporation and General Electric both listed a Sukuk on the exchange, each breaking new ground in its own way, as detailed below.

Towards the end of the year the exchange held a very successful investor conference in New York jointly with Dubai Financial Market (DFM) and listed companies of both exchanges. Then in December DFM announced it would acquire NASDAQ Dubai from its current owners, Borse Dubai and NASDAQ OMX. At the same time the two Dubai exchanges disclosed plans to integrate key market operations functions, subject to regulatory approval. As a result of these exciting developments, the regional strength of DFM will complement the international focus of NASDAQ Dubai, to the benefit of both. In particular, retail investor access to NASDAQ Dubai equities will increase. This will bring Dubai closer to its goal of creating a powerful capital markets hub for the GCC and the wider Middle East.


Reported equities volumes rose by 30% in 2009 over the previous year, reaching 3.1 billion shares. This was satisfactory growth in a period when volumes on many other exchanges declined amid turbulent global economic conditions.

An increase in trading volumes carried out on the exchange by UAE-based brokers in 2009 was particularly welcome, reflecting NASDAQ Dubai’s continuing drive to enhance access for UAE and regional retail investors. EFG Hermes, SHUAA and Mashreq Securities were the three most active regional brokers. Volumes traded by international Members also grew in 2009 and accounted for 79% of total trading during the year. Deutsche Bank was the most active international Member, followed by Citigroup and then HSBC. The exchange introduced mandatory reporting of all over the counter equities trades in September 2008.

Five brokers from three regulatory jurisdictions became Members of the exchange during 2009, bringing the total number of Members to 30 by the end of the year and highlighting the growing appeal of NASDAQ Dubai as the region’s international stock market. In February, Wood & Co, based in the Czech Republic, became the first Eastern Europe firm to join the exchange and in June CBD Financial Services, a subsidiary of Commercial Bank of Dubai, joined as the first Dubai-based General Clearing Member. Abu Dhabi-based Al Awael Securities joined in September, as did Goldman Sachs International. In its first month, Goldman was the third most active Member of the exchange by traded value. Emirates NBD Securities, a subsidiary of Emirates NBD, the largest banking group in the Middle East by assets, became a Member of the exchange in October.


The rapid growth of NASDAQ Dubai’s equity derivatives market was one of the year’s highlights. Beginning with just 90 contracts traded in all of January, by the end of 2009 volumes often reached more than a thousand contracts a day. This was excellent growth for a new market that launched in November 2008, in a region largely unfamiliar with on-exchange equity derivatives and suffering from the global financial crisis. The success of the market received international recognition in October 2009 when the exchange won a Futures & Options World (FOW) award for capital markets innovation.

Volumes totaled 125,000 in 2009 and value reached $7.23 million, with 73% of contracts traded in the second half of the year as interest increased. Trading was driven by Arqaam Capital, the exchange’s first trading Member for derivatives, which is based in the Dubai International Financial Centre (DIFC). Susquehanna International Securities, based in Dublin, provided market making services throughout the year. Activity was assisted by the Market Place Service (MPS), a facility operated by NASDAQ Dubai since March 2009. MPS helps Members to place orders in the order book.

DFM was the most heavily traded futures contract during the year by value, followed by the FTSE NASDAQ Dubai UAE 20 index and then Emaar. By volume, DFM was most heavily traded, followed by DP World and then Drake and Scull.

NASDAQ Dubai’s equity derivatives market consists of futures listed on 21 individual UAE companies and on the FTSE NASDAQ Dubai UAE 20 share index. These have been designed as hedging and investment mechanisms for GCC and international investors.

TheFTSE NASDAQ Dubai UAE 20 index rose by 48% in 2009 to 1,851. Index constituents are selected for high market capitalisation and liquidity as well as openness to foreign investment. The index is well correlated with markets across the Middle East, making it an effective tool for managing exposure to the region.

Dubai Gold Securities

The listing of Dubai Gold Securities (DGS) in March gave the region’s investors a unique Shariah-compliant route to gain exposure to the price of gold. The World Gold Council (WGC) teamed up with Dubai Multi Commodities Centre (DMCC) to create DGS, which are traded on the exchange just like shares. Each security is valued at about 1/10th of the spot price of gold.

Trading of DGS totaled 81,522 in 2009, with 52% of trades taking place in the last quarter of the year. DGS are the first exchange-traded commodity to list on NASDAQ Dubai and the only gold security to be listed in the Middle East by the WGC and DMCC.

New Members in 2008

Members Activities Jurisdiction
Al Ramz Securities LLC Trading Member UAE
Arqaam Capital Ltd Trading Member DIFC
Direct Broker for Financial Services LLC (Mubasher) Trading Member UAE
Diwan Capital Ltd Trading Member DIFC
Gulf National Securities Centre International Ltd Trading Member DIFC
J.P.Morgan Securities Ltd Trading Member UK
MAC Capital Ltd Trading Member DIFC
Mashreq Securities LLC Trading Member UAE
Susquehanna International Securities Ltd Trading Member Irish Republic
Union Brokerage Company General Clearing Member UAE

The exchange strengthened its position as one of the world's leading venues for Sukuk with the listing of two significant issues in 2009. In November the International Finance Corporation (IFC), an arm of the World Bank, listed a $100 million Sukuk that raised money for Middle East health and education investments. Visiting Dubai, Lars Thunell, chief executive of the IFC, described the Sukuk as "an innovative way to create opportunities for Islamic investors who want to make a positive social impact".

The Sukuk was the first to be issued in the GCC by a non-Islamic financial institution and was a significant step towards further integration of Sukuk into mainstream capital markets.

The securities of IFC's Sukuk are also the first to be held on NASDAQ Dubai's central securities depository, providing securities holders with an efficient and streamlined service. Citi was appointed as the issuing and paying agent for the Sukuk.

In December GE Capital, the finance arm of General Electric, listed a $500 million Sukuk on NASDAQ Dubai. This was the first Sukuk to be issued by a major US company. The underlying assets are interests in a portfolio of aircraft and rental payments from leasing them.

New York investor roadshow

Leading US fund managers and institutional investors attended a packed Borse Dubai International Investor Conference in New York in November, meeting executives of NASDAQ Dubai and DFM as well as 14-Dubai listed companies. These included DP World, Depa, Hikma Pharmaceuticals and NetSol from NASDAQ Dubai’s market.

Essa Kazim, the Chairman of Borse Dubai – the majority owner of both DFM and NASDAQ Dubai – opened the roadshow, which addressed the economic outlook for Dubai and the GCC as well as the prospects of the individual listed companies. Jeff Singer, Chief Executive of NASDAQ Dubai, delivered a presentation on regional IPO trends as well as NASDAQ Dubai's own market, including the rapid growth in 2009 of its derivatives trading. Organised in cooperation with Goldman Sachs and Citigroup Global Markets, the roadshow included more than 200 one-on-one and group meetings at which the listed companies gave details of their strategies and development.

Growing synergies with DFM

DFM announced in December that it had agreed to acquire NASDAQ Dubai from its current owners, Borse Dubai and NASDAQ OMX, for $121 million. NASDAQ Dubai welcomed the announcement and at the same time the two exchanges disclosed plans to develop closer operational ties in 2010, designed to improve access to NASDAQ Dubai securities for many of the DFM's 600,000 retail investors. Jeff Singer, Chief Executive of NASDAQ Dubai, said: "Investors will be able to trade seamlessly on both exchanges as key back office functions, such as trading, custody and clearing, will be consolidated early next year. The combined strengths of the two exchanges will help attract new issuers, from across the region and internationally, who will be able to choose which of the two exchanges is appropriate for them according to their commercial and regulatory preferences."

DFM has achieved success as a thriving UAE-focused market driven by retail investors, while NASDAQ Dubai has built strong international connections and an international regulatory structure. Consolidation of the exchanges' market operations will build critical mass for Dubai's capital markets faster than if the exchanges continued to operate separately, enabling Dubai to fulfill its regional leadership potential in this area.

NASDAQ Dubai will remain a distinct market with its own Members, regulated by the Dubai Financial Services Authority (DFSA) and maintaining its own Listing Rules and Business Rules. The maintenance of high regulatory standards will continue to be a key element of the exchange's value proposition as it seeks further listings.


Thirty-eight employees of 13 brokerage firms passed the NASDAQ Dubai Trading Managers exam in 2009 after taking a course delivered by NASDAQ Dubai Academy. In order to trade on the exchange, a broker must employ at least one staff member who has passed the exam. The Academy also focused on four other key capital markets topics over the year: derivatives, investor relations, anti-money laundering and financial reporting. Many courses were delivered in both English and Arabic.

An intensive two-day course in March on how and why to trade equity derivatives was followed in April, May and June by a series of two-hour sessions on derivatives given jointly with DIFC-based Arqaam Capital, a derivatives trading Member of the exchange. For its anti-money laundering, market abuse and compliance courses in August, September and November, the Academy teamed up with the DIFC-based training provider Total Solutions.

For the first time, the Academy delivered courses in investor relations and financial corporate communications in 2009, in conjunction with the London-based training company FinanceTalking.

These courses in June, July and November were attended by staff of eight companies listed in the UAE and Saudi Arabia. In November, the Academy in association with FinanceTalking delivered a course in how to understand financial results and write annual reports.

Jeff's Signature

Jeff Singer

Chief Executive Officer

Jeff Singer

Jeff Singer

Chief Executive Officer


NASDAQ Dubai wins
FOW innovation Award

NASDAQ Dubai's equity derivatives market won the Futures & Options World (FOW) 2009 Award for "Best innovation by an exchange in product design, Middle East." UK-based FOW said: "Pushing ahead with the launch of the market amid the worst (global) recession for decades, and when some in the industry voiced doubts, is to be applauded. The resulting platform offers greater risk management scope for investors in the region, at a time of extreme market volatility."