Nasdaq Dubai will launch futures trading in MSCI’s index of UAE equities in January, as the equities and derivatives exchange continues to expand its market and improve product offerings for investors.
The move will open a new avenue for local, regional and international investors to gain exposure to the performance of some of the top UAE companies included in the index, Nasdaq Dubai said in a statement on Wednesday. Trading will begin on January 15, it said.
“Launching contracts on MSCI’s UAE equity index is an important step in the rapid expansion of Nasdaq Dubai’s equity derivatives market,” Hamed Ali, chief executive of Nasdaq Dubai, said. “It will encourage further participation from international and regional funds and other investors, including individuals, who are looking for new and attractive opportunities to increase their exposure to the UAE’s investment landscape.”
The index has 11 constituent companies that are among the largest and most liquid in the UAE, including ports operator DP World, Dubai’s biggest listed developer Emaar Properties and the country's top lender First Abu Dhabi Bank.
The benchmark is widely tracked by investors around the world. By following the index, futures investors can hedge their positions and make gains whether the index is rising or falling, the exchange noted.
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The futures on the UAE index are being launched under a 2017 licence agreement which also enables Nasdaq Dubai to launch futures and options on MSCI indexes of a number of GCC and regional equity markets. More than $11 trillion in assets under management is estimated to be benchmarked to index provider MSCI’s gauges worldwide.
Nasdaq Dubai launched UAE futures trading in September 2016. Last year, the bourse added futures linked to the Dubai Financial Market’s benchmark share index as well as futures linked to the Abu Dhabi Securities Exchange’s main gauge that are traded on Nasdaq Dubai’s derivatives platform.
In July, the exchange announced 12 Saudi listed companies, with a combined market value of 859 billion Saudi riyals (Dh841.3bn), for which it plans to launch futures.
The single stock futures will be traded on Nasdaq Dubai in Saudi riyals, which is the currency of the underlying shares.