Nasdaq Dubai to create futures on Emaar Development to enable investors to take a position on share price
Move supports liquidity of underlying shares with SHUAA Capital as Market Maker
Number of UAE companies on which futures are offered by the exchange will rise to 14
Nasdaq Dubai will add Emaar Development to its futures market as soon as the company lists its shares on Dubai Financial Market (DFM) following its initial public offering (IPO). The listing is expected to take place on November 22, 2017.
Investors will be able to trade futures on Emaar Development in order to take a position on the likely movement of the share price, making use of leverage to magnify the financial outcome of their futures trades by several times their initial investment. SHUAA Capital will make a market in Emaar Development futures to facilitate liquidity.
The sale of shares in Emaar Development, a leading developer of residential and commercial property in the UAE, is valued at AED 4.82 billion making the IPO the largest in the country since 2014. The company will join 13 other UAE-listed businesses already on Nasdaq Dubai’s equity futures market, which offers one-month, two-month and three-month single stock futures and has expanded rapidly since it opened in September 2016.
Hamed Ali, Chief Executive of Nasdaq Dubai, said: “The launch of futures on one of Dubai’s leading property companies as soon as it lists demonstrates that Dubai’s capital markets infrastructure is working efficiently and responsively to meet the needs of investors. Emaar Development adds further depth to Nasdaq Dubai’s futures market as a growing range of investors make use of the platform to take a position on the future share price, including the ability to make gains when underlying shares are falling as well as rising.”
Fawad Tariq-Khan, General Manager of SHUAA Capital said: “Our provision of market making services in Emaar Development will provide key support for investors by offering continuous buy and sell prices with an attractive spread, enabling them to take part with confidence in the operation of the market. As the most active Market Maker, SHUAA Capital will continue to prudently deploy this highly specialized service to engage and grow Nasdaq Dubai’s futures market further, and in-turn look forward to supporting the overall growth of the UAE’s capital markets framework.”
SHUAA Capital has been market making on all Nasdaq Dubai futures since the market opened.
More than 2.9 million contracts have traded on the futures market since inception, with Emaar Properties the most highly traded by value followed by Union Properties and DXB Entertainments. Traded value in all the futures rose strongly in October 2017 to reach 265,000 contracts, up 135% from September.
Last month Nasdaq Dubai announced agreements with MSCI, Dubai Financial Market (DFM) and Abu Dhabi Securities Market (ADX) under which the exchange will create futures on their equity indices. Launch dates will be announced soon. The index derivatives will be a first in the region and will attract further international and regional participation in Dubai’s capital markets.