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

SUMMARY


  • NASDAQ Dubai to build liquidity through closer DFM ties
  • Derivatives volumes reach 125,000 in 2009
  • DGS volumes reach 81, 522 in 2009
  • GE Capital lists $500 million Sukuk
  • Investors bullish on NASDAQ Dubai stocks
  • FTSE NASDAQ Dubai UAE 20 share index rises 48% in 2009
  • Listing on NASDAQ Dubai - FAQs
 
NASDAQ Dubai to build liquidity through closer DFM ties

After its reported equity trading volumes rose by 30% in 2009, NASDAQ Dubai looks forward to further building its liquidity by developing closer operational ties with Dubai Financial Market (DFM). This strategic policy is supported by DFM’s offer in December 2009 to acquire all the shares of NASDAQ Dubai, subject to regulatory approval.

NASDAQ Dubai will provide market participants with timely information about all operational changes.

Welcoming DFM’s acquisition announcement, Jeff Singer, Chief Executive of NASDAQ Dubai, said in December: “The new ownership structure will create a dynamic new force in the region’s capital markets, by combining the regional and international strengths of DFM and NASDAQ Dubai. Collaboration between the two exchanges will increase, promoting higher liquidity and more listings on both of them. Read press release here.

NASDAQ Dubai’s equity trading volumes rose to 3.10 billion shares in 2009, up 30% from the total of 2.39 billion in 2008.

Volumes in the month of December 2009 reached 410 million shares, the second highest monthly total of that year. This was a 170% increase over the November 2009 figure of 152 million; it was also 170% higher than the December 2008 figure, which also reached 152 million.

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

Derivatives volumes reach 125,000 in 2009

NASDAQ Dubai’s equity derivatives market began 2009 with just 90 contracts traded in January and ended the year with thousands traded every week. This was excellent growth for a new market that launched in November 2008 in a region largely unfamiliar with on-exchange equity derivatives.

Volumes totaled 125,000 in 2009, with 73% of contracts traded in the second half of the year.

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 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.

DFM was the most heavily traded futures contract in 2009 by value, followed by the UAE 20 index and then Emaar. By volume, DFM was most heavily traded, followed by DP World and then Drake and Scull.

To promote understanding of derivatives in the region, NASDAQ Dubai Academy will run a series of courses in 2010 aimed at industry professionals. The first two will take place in March. (For details see Academy below).

DGS volumes reach 81, 522 in 2009

Trading in Dubai Gold Securities (DGS) totaled 81,522 in 2009 following their listing in March, with 52% of trades taking place in the last quarter of the year. In December 641 DGS traded, down from 40,668 in November.

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.

GE Capital lists $500 million Sukuk

GE Capital, the finance arm of General Electric, listed a $500 million Sukuk on NASDAQ Dubai on December 10. The Sukuk was the first to be issued by a major US company and was sold to investors across the Middle East, Asia and Europe.

Aris Kekedjian, President and CEO, GE Capital Middle East & Africa Ltd., said: “We are proud to announce our secondary listing on NASDAQ Dubai and look to continue supporting the region in our ongoing efforts.”

Read the press release here.

Listing on NASDAQ Dubai - FAQs
To assist potential issuers of equity or debt, NASDAQ Dubai has posted FAQs about listing on its website here. These give guidance on issues such as minimum market capitalisation, filing financial statements, and disseminating price sensitive information.
Exchange Views
In his latest monthly column, Jeff Singer, Chief Executive of NASDAQ Dubai, described how intervention by governments helped to avert global economic meltdown in 2009, and argued that private sector entrepreneurial drive must return to the forefront in 2010 to keep recovery on track. The Exchange Views column was published in Gulf News and in Al Khaleej
Investors bullish on NASDAQ Dubai stocks
A December monthly survey of investors by SHUAA Capital showed that more investors believe share prices on NASDAQ Dubai will rise over the next 6 months than expect a fall. The positive balance as assessed by SHUAA was 10%, comparing favourably with a 6.7% balance for the Dow Jones 30 and a zero balance for the FTSE 100.
FTSE NASDAQ Dubai UAE 20 share index rises 48% in 2009 FTSE

The index of 20 leading UAE stocks stabilised in December, dropping just 0.4% to 1,851 over the month, after a 15.5% fall in November. Despite the decline towards the end of the year, the index stood 48% higher at end-December than at end-2008. The UAE 20 index comprises DP World as well as 10 stocks on the DFM and 9 on the ADX.

Read more about the constituents of the index here >

   
Equity futures trading – full year 2009
US$ Futures Contracts Value (US$)
UAE 20 index 97 1,254,799
DPW 18,950 718,170
UAE Dirham Futures Contracts Value (AED)
DFM 22,350 4,823,113
EMAAR 8,930 3,424,860
DSI 16,000 1,605,250
AIR Arabia 15,770 1,558,446
ARTC 4,700 1,410,253
SOROUH 4,470 1,397,050
DANA 9,670 1,105,961
ALDAR 1,960 731,980
RAKPROP 8,100 627,121
DIB 1,940 537,049
UPP 5,360 498,292
SHUAA 2,780 479,642
NBAD 315 338,133
ADCB 1,500 280,532
DIC 1,330 175,680
FGB 140 174,740
AABAR 300 79,050
ARMX 340 61,608
GCEM 10 2,485
Equity futures trading – December 2009

A total of 14,100 derivatives traded in December, down 31% from the November figure of 20,490.

US$ Futures Contracts Value (US$)
DPW 6,350 278,685
UAE Dirham Futures Contracts Value (AED)
DSI 4,500 417,150
AIRARABIA 1,880 161,937
EMAAR 150 59,400
SOROUH 200 55,800
DFM 340 50,470
SHUAA 260 33,750
RAKPROP 250 14,575
UPP 170 12,240
   
Members Market Share
Deutsche Bank was the most active broker on the exchange by traded value in 2009, followed closely by Citigroup and then HSBC. EFG Hermes, SHUAA and Mashreq Securities were the three most active regional brokers.
Market share, by value of all traded securities – full year 2009
Member Market Share %
Deutsche Bank 23.68
Citigroup Global Markets 22.93
HSBC 11.78
EFG Hermes 8.05
Merrill Lynch International 5.61
Morgan Stanley & Co International 4.42
Shuaa Capital International 4.40
Wood & Co. 2.39
Mashreq Securities 2.31
JP Morgan Securities 2.08
Goldman Sachs International 2.01
Arqaam Capital 1.98
Credit Suisse Securities (Europe)  1.47
ABN Amro Bank 1.31
DBFS (Mubasher) 1.25
UBS 1.14
Emirates NBD Capital 1.00
Susquehanna International Securities  0.86
Al Ramz 0.55
EIS 0.28
MAC Capital  0.24
Mashreq Capital 0.21
Daman 0.04
ING 0.03
GNS 0.01
Al Awael 0.01
Market share, by value of all traded securities – December 2009
Member Market Share %
Deutsche Bank 28.30
Citigroup Global Markets 19.36
EFG Hermes 12.77
Morgan Stanley & Co International  10.32
Wood & Co 5.52
HSBC 4.81
Shuaa Capital International 4.49
Arqaam Capital 3.27
Credit Suisse Securities (Europe) 2.54
Mashreq Securities 1.40
Goldman Sachs International 1.38
Al Ramz 1.20
UBS 1.16
DBFS (Mubasher) 1.10
Merrill Lynch International 0.77
Emirates NBD Capital 0.70
EIS 0.32
MAC Capital  0.31
Susquehanna International Securities 0.27
JP Morgan Securities 0.01
   
NASDAQ Dubai Academy

NASDAQ Dubai Academy provides training courses in English and Arabic for market participants including issuers, Members, investors and the general public.

Courses scheduled in early 2010 include (in Dubai unless otherwise stated):

  • Make the best trading decision with Position Control (English)
    February 22 (in conjunction with SUNGARD)
  • Introduction to Financial Markets, Financial Public Relations and Investor Relations (KUWAIT) (English)
    February 15 (in conjunction with FinanceTalking)
  • Introduction to Financial Results and Annual Reports (KUWAIT) (English)
    February 16 (in conjunction with FinanceTalking)
  • Best Practice and Compliance in Financial Communications (KUWAIT) (English)
    February 17 (in conjunction with FinanceTalking)
  • The Fundamentals of Trading Equity Derivatives (English)
    March 17 (in conjunction with 7 City)
  • Exotics, Strategies, Greeks and Managing Option Risk in a Trading Book (English)
    March 18 (in conjunction with 7 City)