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Nasdaq Dubai launches futures on DFM General Index in breakthrough for investors in Middle East capital markets

PUBLISHED ON 18-Feb-2018
Nasdaq Dubai launches futures on DFM General Index in breakthrough for investors in Middle East capital markets

  • Share Index contracts offer new way to gain from performance of leading Dubai-listed companies
  • Investment and hedging opportunities will suit global and regional institutions and individuals

His Excellency Essa Kazim, Chairman of Dubai Financial Market (DFM) and  Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, rang the market-opening bell to celebrate the launch today by Nasdaq Dubai of futures linked to DFM’s General Index. The share index contracts are a breakthrough for investors as they provide new toolsto track the performance of DFM, the GCC’s second largest stock market by traded value.

By trading futures contracts on the DFM General Index (DFMGI), 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 DFM including;Emaar Properties, Dubai Islamic Bank and Dubai Investments, without trading either their shares or single stock futures.

The DFMGI tracks diverse companies in sectors including property, banking, telecoms, insurance and transport. The index increased from its base value of 1000 points in 2003 to a high of 8485 in November 2005 and currently stands at 3330.

His Excellency Essa Kazim, Chairman of DFM, said: “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.”

Nasdaq Dubai offers two quarterly contracts in DFMGI futures. SHUAA Capital is acting as market maker to support liquidity.

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 totaled more than AED 500 million from more than 2.5 million contracts.

Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, said: “Today’s addition of our 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 DFMGI index is falling or rising, and make use of leverage to maximize their exposure. We will further increase our collaboration with DFM and regional and international brokers to make Dubai a dynamic global centre for equity derivatives activity including trading and clearing.”   

Hamed Ali, Chief Executive of Nasdaq Dubai, said: “The UAE’s capital markets community has provided crucial support for the success of our futures market so far and we will continue to work with market participants to further raise awareness and understanding of futures products among financial professionals and the public. Nasdaq Dubai is committed to expanding the range of these sophisticated investment tools on its market to enable investors to protect and increase their wealth.”

Nasdaq Dubai’s futures market currently operates with eight leading UAE brokerages as Members and two active market makers. All DFM and Nasdaq Dubai brokerages can apply to be Members of the futures market, and all investors who can trade equities can also trade Nasdaq Dubai equity futures. Nasdaq Dubai is in discussions with other regional and international financial institutions who wish to take part in trading or clearing on the market.

Nasdaq Dubai also launched futures today on Abu Dhabi Securities Exchange’s ADI index. Further expansion of Nasdaq Dubai’s futures market will include the creation of futures on regional MSCI equity indices under a licence agreement announced last October, as well as more single stock futures and option products at a later date. 

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Mark Fisher
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Email : corpcomm@nasdaqdubai.com