Abu Dhabi Securities Exchange to launch derivatives market this year

The Abu Dhabi Securities Exchange (ADX) has signed an agreement with Nasdaq, that will enable the bourse to launch a derivatives market this year.

Nasdaq will deliver marketplace technology solutions, including matching, real-time clearing and settlement technology. The exchange plans to launch single stock futures and index futures in the fourth quarter of this year before expanding to a wider range of derivative products. The initiative will further diversify investment avenues and provide investors with hedging tools for effective risk management.

It will also introduce central counterparty clearing (CCP) to promote clearing efficiency and stability, official news agency WAM reported.

ADX is expanding asset classes and developing new offerings for both regional and international investors. The ADX General Index (ADI) has recently reached 7,700 points for the first time, supported by a series of listings and increased participation by international investors. In addition, the index has gained 52 per cent year to date, a statement said. As of August 2021, ADX has 78 companies listed on its main and second market.

#AbuDhabi_Securities_Exchange @adx_ae announced that it has taken a key step towards launching a derivatives market this year by signing an agreement with @Nasdaq to deliver marketplace technology solutions, including matching, real-time clearing and settlement technology.#Nasdaq pic.twitter.com/OW3tPbn7XU

— ADX (@ADX_AE) September 1, 2021

Mohammed Ali Al Shorafa Al Hammadi, chairman of ADX, commented: “ADX is on a journey to significantly enhance liquidity and expand market capitalisation through our ‘ADX One’ strategy, which provides a clear road map for further development of a vibrant exchange. By deepening our capital markets and increasing the range of innovative products and services, we are supporting the UAE’s strategy for economic diversification, providing growth companies with favourable access to global capital and allowing investors to participate in the UAE’s ambitions.”

The ADX One strategy, launched at the start of 2021, aims to bring a broader offering of products and services to market and invest in infrastructure in partnership with global market leaders.

Lars Ottersgard, executive vice president and head of Nasdaq market technology, added: “By leveraging Nasdaq’s robust and flexible technology solutions, ADX can further evolve its endeavours to expand into a leading derivatives marketplace and one of the largest multi-asset marketplaces in the Middle East. We look forward to progressing our technology partnership and supporting ADX in their growth journey.”

Last month, ADX also said that it would cut in half its trading commission and extend trading hours in an attempt to boost liquidity in the market.

Read: Abu Dhabi Exchange cuts trading fees, extends trading hours

Trading fees will be reduced to 0.025 per cent from 0.05 per cent starting from September 1.