The NASDAQ Dubai exchange is the region’s premier market for financial trading. Now, a company known for its position in the brokerage industry is helping government parties launch a new equity futures market for investors.
A story in Middle East Forbes reported that NASDAQ Dubai’s equity futures market opened in September. The story calls the new exchange a “collaboration” between exchange administrators and brokerage companies such as Menacorp, which facilitates more than 60 percent of all trading across the regional exchange.
With the new futures exchange, investors will be able to buy into the future value of various regional stocks.
Futures trading is a popular choice among the global community of investors, partly because of its low market correlation.
“The futures market serves as a valuable tool that certain businesses depend on to reduce their risks,” Racha Al Khawaja, head of Institutional Coverage at Menacorp, said in a press statement. “Looking at the success stories of international futures markets, we can say with confidence that equity futures will soon rise to become an important segment in the coming years. It is indeed a privilege to be chosen as a top broker on Nasdaq Dubai and such an accomplishment is a reflection of our long-term commitment to excellence, quality and topnotch client-focused solutions.”
Nabil Al Rantisi, managing director Brokerage for Menacorp, also went on record to Forbes, talking about competition within the market:
“On UAE markets, we have 49 competitors, and we know that clients will not come to us by default,” he said. “It requires hard work, outstanding services and constant innovation to deliver the best offering available in the market and differentiate ourselves from the crowd. With nearly two-thirds of all Nasdaq Dubai’s equity futures transactions going through our company, we are more than encouraged to further reinforce our strategy to become a one-stop-shop for investors for their trades not only in the UAE market but also in the whole of MENA region and the rest of the world. We look forward to sustaining our leading market position and exceeding the expectations of our clients in the years to come.”
For more, Gulf News Journal spoke with Al Rantisi recently.
Al Rantisi stressed that part of the utility of the new futures market is that it facilitates more complex portfolio positions, with which investors can balance risk.
“We look at Nasdaq Dubai Futures as a great addition to the local capital markets,” Al Rantisi said. “It allows investors to hedge their positions, which leads to a safer investing environment.”
Although the exchange is now open, Al Rantisi said a lot of work still remains to be done.
“We are working hard on educating investors about the risks and rewards associated with such products.” Al Rantisi said.
In the past, financial experts in the region have talked about shaky progress in local futures markets and the challenge of federal regulations. It remains to be seen how the new exchange will alleviate these problems and affect a community of investors with an appetite for futures trading.