Dubai: The Abu Dhabi Securities Exchange (ADX) has introduced a derivatives market, as the exchange ramps up initiatives to develop Abu Dhabi’s capital market. With the launch of single-equity futures, the new market will give investors the opportunity to benefit from increased leverage, two-way market exposure, and hedging capabilities.
Traders can access single equity futures of Etisalat, First Abu Dhabi Bank (FAB), International Holding Company (IHC), ADNOC Distribution and Aldar Properties from today - more securities are to be added later this year and in 2022. Index futures will be introduced in the first-quarter of 2022. (The derivatives market is using marketplace technology delivered by Nasdaq.)
Three market makers - ADQ’s Q Market Makers, BHM Capital, and Al Ramz Capital - join the ADX Derivatives market to provide liquidity on the new platform. The dispensation of short-term margin trading licenses to more brokerages aims for increased participation. Alongside the launch, central counterparty clearing (CCP) to promote clearing efficiency, stability, and confidence in the market was also introduced.
“Supported by ADQ’s Q Market Makers and other market makers, the instruments will be highly liquid allowing for active participation,” said Saeed Hamad Al Dhaheri, CEO of ADX. “The continued development of ADX will encourage companies to raise capital to fund their needs while diversifying their investor base.”
The ‘ADX One’ strategy, launched at the start of this year, aims to bring a broader offering of products and services to market.
The market capitalisation of the Abu Dhabi Securities Market General Index recently has nearly doubled since the beginning of the year, rising to Dh1.48 trillion, supported by a series of listings and increased international investment. Meanwhile, the benchmark Abu Dhabi General Index (ADI) has gained 56 per cent during the first-ten months of this year, making it one of the best performing equity indexes in the world within the same period.