Business | Markets
Nasdaq Dubai set to begin derivatives trading today
Nasdaq Dubai, the rebranded Dubai International Financial Exchange is working on a strategy to increase its liquidity, the number of listings and the number of asset classes traded on the bourse, Jeff Singer, chief executive of Nasdaq Dubai, said on Tuesday.
- By Babu Das Augustine, Banking Editor
- Published: 23:40 November 18, 2008
- From left: Bob Greifeld, chief executive officer of the Nasdaq Omx Group; Eisa Kazim, Chairman of Borse Dubai; Soud Ba'alawy, Chairman of Nasdaq Dubai, and Jeffrey H. Singer, chief executive of Nasdaq Dubai, announcing developments at the DIFCX and growing links with Nasdaq OMX at DIFX.
- Image Credit: Arshad Ali/Gulf News
Dubai: Nasdaq Dubai, the rebranded Dubai International Financial Exchange is working on a strategy to increase its liquidity, the number of listings and the number of asset classes traded on the bourse, Jeff Singer, chief executive of Nasdaq Dubai, said on Tuesday.
The exchange currently lists shares, structured products, Sukuk (Islamic bonds) and conventional bonds and begins equity derivatives trading on Wednesday.
"Nasdaq Dubai is taking active steps to further develop its market including extending its opening hours, opening on Sundays, and allowing listings in the UAE dirham. We will continue to develop new asset classes as well as seek further primary and secondary equity listings," Singer said on Tuesday.
Nasdaq OMX Group, which owns one-third stake in the exchange announced yesterday that it would list on Nasdaq Dubai and start trading on the bourse from November 20.
"Nasdaq Dubai provides a first-class venue through which Nasdaq OMX listed companies can reach new investors in the Gulf and the Middle East. We have 3,900 listed companies on our market many of them have the potential to cross list on Nasdaq Dubai," said Bob Greifeld, Chief Executive of Nasdaq OMX Group and Vice Chairman of Nasdaq Dubai.
As part of its efforts to offer multiple asset classes to regional and international investors Nasdaq Dubai will launch an index derivative key UAE-listed stocks as underlying assets today.
Retail access
The exchange members will be able to trade single stock futures on UAE-listed equities and a future on the FTSE DIFX UAE 20 equity index calculated by FTSE International.
"Derivatives trading can provide investors with price insurance and create liquidity and stability in the underlying shares," said Singer.
The first derivatives product will be a futures contract based on the FTSE/DIFX UAE 20 will include stocks from the Nasdaq Dubai, Abu Dhabi Exchange and Dubai Financial Market. The underlying basket will include 12 shares listed on DFM, 7 on ADX and one on Nasdaq Dubai.
Greifeld said the beginning of derivatives trading with centralised clearing will give stability to the market while offering the much needed liquidity and stability. "In the context of the current financial crisis we see that over-the-counter derivative markets with bilateral clearing was one of the reasons for several defaults that ultimately led to a major crisis for financial institutions. A trading system with centralised clearing can avoid such risky situations," said Greifeld.
"The equity derivatives market will cater initially for institutional investors and in due course for individual investors," said Singer.
In the derivatives trading Susquehanna International Securities is a market maker and Arqaam Capital is a Trading Member.
To enhance the local retail access to the market Nasdaq Dubai is implementing a number of measures. Starting yesterday the market has extended trading hours from 10am to 5pm. Previously it was 11.45am to 5pm. Starting next Sunday, the market will be open for trading on Sundays.
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