Nasdaq Dubai and market participants celebrate launch of equity futures
05 September 2016Landmark development for the region’s capital markets· SHUAA Capital is market maker; leading UAE brokerages are trading· Futures are offered on UAE companies including Emaar Properties, Aldar and DP World· Market gives investors new tools to increase and protect their wealthDubai – Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, rang the market opening-bell today to celebrate the
Landmark development for the region’s capital markets· SHUAA Capital is market maker; leading UAE brokerages are trading
· Market gives investors new tools to increase and protect their wealth
Dubai – Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, rang the market opening-bell today to celebrate the launch of the exchange’s single stock futures market on the shares of leading UAE companies.
Nasdaq Dubai‘s new equity futures market is a groundbreaking initiative that offers unique tools for investment and wealth protection to regional and international investors, both institutions and individuals.The market-opening ceremony was attended by Essa Kazim, Governor of DIFC and Chairman of Dubai Financial Market (DFM); Hamed Ali, Chief Executive of Nasdaq Dubai, and Nasdaq Dubai Board members; Abdul Rahman Al Hareb, Chairman of SHUAA Capital, which is providing market making services for the new market through SHUAA Capital International Ltd.; and representatives of six companies that are providing brokerage services: Mohammad Al Mortada Al Dandashi, Partner & Managing Director, Al Ramz Capital; Dennis Wijsmuller, Chief Operating Officer, Arqaam Capital;Hosam El Gendy, Head of Brokerage UAE of EFG Hermes; Ayman Hamed, General Manager of Integrated Securities; Fathi Ben Grira, Chief Executive of Menacorp; and Wael Darwish, General Manager, Mubasher Financial Services Dubai.
The seven companies on which futures are offered initially are: Aldar Properties, Arabtec Holding, DP World, Dubai Islamic Bank, Dubai Parks and Resorts, Emaar Properties and Etisalat. All the companies have a share listing on Nasdaq Dubai, DFM, or Abu Dhabi Securities Exchange (ADX). Futures on other companies listed on UAE and MENA exchanges will be added in due course, as well as index futures and equity options.
Essa Kazim, Governor of DIFC and Chairman of DFM, said: “The launch of this innovative market underlines Dubai’s leadership role in expanding the opportunities provided by Middle East’s capital markets infrastructure. Nasdaq Dubai’s single stock futures provide investors from the region and around the world with sophisticated new ways to protect and increase their wealth, including through hedging and leverage.”Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, said: “Supported by the active participation of many of the UAE’s leading financial services firms, Nasdaq Dubai is the only exchange that offers futures on shares of UAE-listed companies including some of the region’s largest and most successful businesses with operations around the world. We are already taking steps to expand our futures market by adding selected products that will be attractive to investors.”
Nasdaq Dubai’s futures market opened on September 1, 2016 and in the first two days of trading 4,385 futures contracts were traded.
Abdul Rahman Al Hareb, Chairman of SHUAA Capital, said: “The arrival of the single stock futures platform is the most significant asset class expansion to reach the Middle East for many years. It opens the door for new international investors to gain exposure to the performance of prominent stocks, as well as offering existing investors more sophisticated and flexible tools to manage their portfolio. SHUAA Capital has been an equity Market Maker on Nasdaq Dubai since 2014, and is pleased to be a founding member of this initiative, which is in-line with the UAE’s efforts towards further building a formidable reputation as a financial hub on the world stage.”
Hamed Ali, Chief Executive of Nasdaq Dubai, said: “Leverage on futures gives investors the possibility to make larger gains than if they had traded the underlying shares, and they can also use futures to protect their existing wealth. We are in discussions with a number of leading regional and international brokerages that wish to join the platform as it expands, either as market makers or to provide broking services to their clients.”
Up front payments for Nasdaq Dubai futures are based on margins of 10%-30% of the contract value.
Investors can gain from futures when the underlying share price falls, as well as when it rises. The futures are offered with 1-month, 2-month, and 3-month expiry dates in the currency of the underlying share listing.
Nasdaq Dubai has launched a series of training courses through its Academy to help investors understand single stock futures and how to trade them, as well as a simulated trading game and other educational material. The exchange encourages informed and responsible trading by investors who understand the potential losses as well as potential gains of their positions.
Details of Nasdaq Dubai’s single stock futures market can be viewed at www.nasdaqdubai.com/products/futures
An equity futures contract is a commitment to buy or sell shares at a specific price at a specific future date. They can be traded through a broker, just like shares themselves. Tens of billions of dollars of equity futures are traded on exchanges every year in the US, Europe and Asia.
Mohammad Al Mortada Al Dandashi, Partner & Managing Director, Al Ramz Capital, said: “Introducing futures contracts represents a new era in the UAE’s financial industry and a major milestone in progressing towards a developed market. Al Ramz Capital is proud to partner with Nasdaq Dubai to spearhead the initiative and is keen on maximizing the benefit from such new markets in the best interest of investors. We believe that such an advanced step requires educational campaigns and high level of awareness to ensure a successful story.”
Hosam El Gendy, Head of Brokerage UAE of EFG Hermes said: “Single stock futures are already a standard tool for numerous investors. Their launch on Nasdaq Dubai is a very welcome addition to the MENA region’s investment menu, opening new strategies to generate returns and protect wealth as investors look to capture compelling opportunities in MENA’s equity markets.”
Ayman Hamed, General Manager of Integrated Securities, added: “Integrated Securities is delighted to support the launch of the Nasdaq Dubai futures market, a key milestone in the evolution of the UAE capital markets. As part of Integrated Securities’ already extensive offering, our clients will now benefit from the investment strategies afforded by the ability to trade stock futures on some of the UAE’s leading companies.”
Fathi Ben Grira, Chief Executive of Menacorp, said: “We are very excited by the effective launch of equity futures on Nasdaq Dubai as we see it as a major milestone in improving the level of sophistication of UAE markets. Without doubt, this is definitely a game changer for all market participants.”
Wael Darwish, General Manager of Mubasher Financial Services UAE, said: “Nasdaq Dubai’s futures market provides an excellent investment option for traders of the Dubai market, and marks an important turning point in the investment ecosystem in the Middle East region. We believe that Mubasher Trade’s wide customer base will receive this product with enthusiasm and interest, and we will work diligently side-by-side with Nasdaq Dubai to ensure a successful launch for this product.”
About Nasdaq Dubai
Nasdaq Dubai is the international financial exchange serving the region between Western Europe and East Asia. It welcomes regional as well as global issuers that seek regional and international investment. The exchange currently lists shares, derivatives, Sukuk (Islamic bonds), conventional bonds and Real Estate Investment Trusts (REITS).
The majority shareholder of Nasdaq Dubai is Dubai Financial Market with a two-thirds stake. Borse Dubai owns one third of the shares. The regulator of Nasdaq Dubai is the Dubai Financial Services Authority (DFSA). Nasdaq Dubai is located in the Dubai International Financial Centre (DIFC).