Dubai, Abu Dhabi market futures to be traded on Nasdaq

Nasdaq Dubai launched its futures market last September



Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange have signed licensing deals allowing futures contracts linked with the DFM General Index (DFMGI) and Abu Dhabi General Index (ADI) to be traded on Nasdaq Dubai’s equity futures market.

The DFMGI tracks a basket of DFM-listed companies in sectors including property, banking, telecoms, insurance and transport. The ADI tracks companies from telecommunication, financial services, real estate, energy and other sectors.

Futures linked with the DFMGI will be traded on Nasdaq Dubai’s futures market from later this year, subject to regulatory approval. No timeline was given for futures linked with the ADI.

The Nasdaq futures market, which was launched in September 2016, currently comprises single stock futures for 13 companies including eight listed on the DFM.

Trading volume has risen 80 per cent from the first six months of operation to reach 1.57m by the end of August. All DFM and Nasdaq Dubai brokers can apply to be futures market members.

“The addition of a DFMGI-linked product to Nasdaq Dubai’s equity futures represents a substantial expansion of the market and widens the opportunities for investors who wish to hedge or invest, as well as make gains whether the value of the index is falling or rising,” said Hamed Ali, CEO of Nasdaq Dubai.

“The two exchanges will further increase their cooperation in order to make Dubai a leading international centre for trading and clearing a wide range of equity derivatives.”

Nasdaq Dubai also announced a licence deal with MSCI last week under which it will use MSCI’s regional indices to create derivatives products.

The exchange initially plans to develop futures contracts based on the MSCI UAE index.

DFM itself plans to introduce regulated short-selling of equities to boost liquidity “in the coming period”.

Read: Dubai Financial Market planning to allow short-selling