One of first equities futures market for Arab stocks began trading on Nasdaq Dubai on Thursday amid increasing efforts to deepen markets at a time when volumes traded have been diminishing.
Futures of Aldar, Arabtec, DP World, Dubai Islamic Bank, Dubai Parks and Resorts and Emaar Properties started trading on Thursday, the stock exchange said. Etisalat futures can also be traded but were not bought or sold on Thursday.
At total of 1,636 contracts traded in 163,600 shares with Al Ramz Capital being the leading broker by traded value, the exchange said.
“Activity on the market looks set to increase steadily over coming months,” a Nasdaq spokesman said. “More market participants will come on and the range of futures offered will expand in stages.”
Most stock markets in the region do not have big trading volumes like their counterparts in New York, London and Tokyo and investors can’t typically use options, futures and short selling to hedge portfolios but are only restricted to buying and selling physical shares.
A number of exchanges, however, offer exchange traded funds, a derivative that typically tracks indices by holding physical shares.
The Dubai Financial Market, the emirate's publicly traded stock exchange, said in July that its second quarter net income fell by 60 per cent as trading declined.
The value of stocks traded on the DFM decreased by 33 per cent to Dh69.5 billion during the first half of the year compared with Dh103.4bn in the same period last year.
Al Ramz, Arqaam Capital, EFG-Hermes, Integrated Securities, Menacorp and Mubasher are also providing brokerage services for the trade in futures. Shuaa Capital, the Dubai-based investment bank, is providing market making services, the exchange said.