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NASDAQ Dubai Monthly | February 2010 If the newsletter is not displaying correctly, click here to read it online 

Welcome to the latest issue of NASDAQ Dubai Monthly, our online newsletter that updates market participants about developments at the exchange.

SUMMARY


  • NASDAQ Dubai prepares closer links with DFM, to build liquidity
  • Equities volumes rise 17% in January
  • DGS volumes reach 3,235
  • Derivatives volumes reach 6,290
  • FTSE NASDAQ Dubai UAE 20 share index falls 9.5% in January
 
NASDAQ Dubai prepares closer links with DFM, to build liquidity

NASDAQ Dubai and Dubai Financial Market (DFM) are working together to build closer operational links, subject to regulatory approval. These are designed to make it easier for UAE retail investors to trade NASDAQ Dubai equities, improving their liquidity.

Under the plan, NASDAQ Dubai will outsource its trading, clearing, settlement and custody functions to DFM. NASDAQ Dubai is also encouraging its equity issuers to switch their listing currency from US dollars to UAE Dirhams. Its daily trading hours will change to 10am-2pm to conform to those of the DFM.

NASDAQ Dubai will maintain its identity as a distinct market, keeping its own Business and Listing Rules and its Official List of Securities. It will continue to be regulated to international standards by the Dubai Financial Services Authority (DFSA).

NASDAQ Dubai is working with its Members, issuers and other market participants to ensure that the outsourcing takes place smoothly. It is likely to be implemented in coming weeks.

The exchange has sent documents that explain the outsourcing project to  market participants,  including a circular for Members.

Derivatives volumes reach 6,290  

Equity derivatives trading volumes reached 6,290 in January 2010, compared to 90 in January 2009 and 14,100 in December 2009. 

A total of 137,250 derivatives have traded since NASDAQ Dubai launched its equity derivatives market in November 2008,  with 65% of trading taking place in the last 6 months as the market has expanded.

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.

The UAE 20 index fell by fell 9.5% in January to 1,700. Index constituents are selected for high market capitalisation and liquidity as well as openness to foreign investment.

By both value and volume, DP World was the most heavily traded futures contract in January 2010, followed by Air Arabia and then DFM.

Equities volumes rise year-on-year

Equities trading volumes on NASDAQ Dubai rose by 17% in January 2010 to 200 million, compared to 171 million in January 2009.

This follows a 30% rise in equities volumes in all of 2009 to 3.10 billion shares in 2009, from 2.39 billion in 2008. Volumes in December 2009 reached 410 million shares, the second highest monthly total of that year.

The exchange introduced mandatory reporting of all over the counter equities trades in September 2008.

DGS volumes reach 3,235

Trading of Dubai Gold Securities (DGS) rose to 3,235 securities in January 2010, an increase of more than 400% over the December 2009 figure of 641.

 A total of 84,757 DGS have traded since they listed on the exchange in March 2009, with 53% of the volume in the last three months.

Each DGS security is valued at approximately 1/10th of the spot price of gold. DGS are an initiative of the Dubai Multi Commodities Centre and the World Gold Council and have been declared Shariah-compliant.

DGS can be traded on NASDAQ Dubai through a broker, just like equities, and have attracted retail and institutional interest. They have been declared Shariah-compliant. See How to trade on NASDAQ Dubai.

 
FTSE NASDAQ Dubai UAE 20 share index falls 9.5% in January

The UAE 20 index fell by fell 9.5% in January to 1,700, its third consecutive monthly drop. The UAE 20 index comprises DP World as well as 10 stocks on the DFM and 9 on the ADX. Its stocks are chosen for large market capitalisation and investability and are free float weighted. Futures contracts listed on the index by NASDAQ Dubai have been designed as a hedging and investment mechanism for GCC and international investors.

Read more about the constituents of the index here >


Equity futures trading – January 2009
US$ Futures Contracts Value (US$)
DPW 5,000 245,400   
UAE Dirham Futures Contracts Value (AED)
AIRARABIA 690 65,300
DFM 400 63,800
UPP 200 11,700
 
Members Market Share

Deutsche Bank was the most active Member of the exchange by equities volume in January 2010, followed by Citibank and then EFG Hermes.

Market share, by value of all traded securities – January 2010
Member Market Share %
Deutsche Bank 26.19
Citigroup Global Markets 18.86
EFG Hermes 12.77
HSBC 8.87
Credit Suisse Securities (Europe) 8.41
Arqaam Capital 6.25
Shuaa Capital International 3.41
Merrill Lynch International 3.31
Morgan Stanley & Co International  2.29
Mashreq Securities 2.09
Emirates NBD Capital 1.8
Goldman Sachs International 1.43
Emirates International Securities 1.11
DBFS (Mubasher) 1.05
UBS 0.84
Al Ramz 0.61
MAC Capital 0.34
JP Morgan Securities 0.3
SusqueHanna International Securities 0.07
 
NASDAQ Dubai Academy

NASDAQ Dubai Academy to expand courses to Saudi Arabia

NASDAQ Dubai Academy provides training courses in English and Arabic for market participants including issuers, Members, investors and the general public.
Training in early 2010 will include three sessions in Saudi Arabia, the first ever to be held there by the Academy.

Scheduled courses (in English and in Dubai unless otherwise stated):

  • Introduction to Financial Markets, Financial Public Relations and Investor Relations (Saudi Arabia)
    April 12, 2010 (in conjunction with FinanceTalking)
  • Best Practice and Compliance in Financial Communications (Saudi Arabia)
    April 13, 2010 (in conjunction with FinanceTalking)
  • Understanding Debt Markets and Debt IR (Saudi Arabia)
    April 14, 2010 (in conjunction with FinanceTalking)
  • The Fundamentals of Trading Equity Derivatives
    April 13, 2010 (in conjunction with 7 City)
  • Exotics, Strategies, Greeks and Managing Option Risk in a Trading Book
    April 14, 2010 (in conjunction with 7 City)