Abu Dhabi Securities Exchange (ADX) and Nasdaq Dubai will launch a futures contract linked to the Abu Dhabi General Index (ADI), enabling investors to trade equity futures on Nasdaq's derivatives platform, the two parties announced.
It follows an almost identical agreement between Nasdaq Dubai and Dubai Financial Market (DFM) on Sunday, to launch a futures contract linked to the DFM General Index (DFMGI), which would also be traded on Nasdaq Dubai.
ADX and Nasdaq Dubai said in a statement on Monday: “Subject to regulatory approval, ADI futures are expected to be traded later this year with the support of leading UAE brokers, and targeted at professional and institutional investors enabling them to take a macro view on the ADX market.”
The move is intended to expand the exchanges’ offerings to investors. Nasdaq Dubai’s derivatives platform currently comprises single stock futures on 13 leading UAE-listed companies.
The number of futures contracts traded on Nasdaq Dubai in the six months to the end of August rose 80 per cent to 1.57 million compared with the previous six-month period
More than 2.5 million futures contracts have traded since the market opened in September 2016.
The ADI’s value, meanwhile, has risen by 70 per cent in the last five years, the parties said. The index is down one per cent so far this year.
“The introduction of index futures is a significant step in the evolution of the UAE capital markets,” said Hamed Ali, chief executive of Nasdaq Dubai.
“Index futures is a universal choice with market participants in an evolving derivatives marketplace and we believe this partnership will enable new opportunities for investors.”
ADX chief executive Rashed Al Blooshi added: “Signing the agreement with Nasdaq Dubai underscores local and global investments communities’ trust in the quality of the global standards adopted by ADX particularly in terms of measuring the overall performance of listed shares.”