Dubai Financial Market has been one of the best performing in the Middle East year-to-date. Recent IPos have helped with the liquidity - and bring on higher visibility too. The launch of futures contracts will be another driver. Image Credit: Shutterstock

Dubai: To add to the IPOs since DEWA last year, the Dubai Financial Market has launched futures contracts tied to its General Index. These contracts are linked to the most liquid and largest companies on the DFM.

The listing and trading of these futures started today (May 29)

Through these contracts, investors can access the recently listed Empower, DEWA, Salik, and others, as well as traditional blue-chips such as Emaar and Aramex. These will allow hedging opportunities for both retail and institutional investors and 'drive more professional investors' participation in the marketplace'.

"DFMGI futures are DFM's latest innovative offering to internationalize Dubai's financial markets and promote market liquidity and depth," DFM said in a statement. "They allow investors to make gains when the index falls and rises and magnify gains through the use of leverage."

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The DFM General Index posted a 4.4 per cent increase last year, followed by a 6.14 per cent upturn in the year-to-date. The futures track the underlying price performance of the DFM General Index, which 'provides a benchmark for the overall performance of the exchange'.

The futures contract will help investors effectively hedge against market volatility and make profitable trades. "The launch of DFMGI Future is further evidence of our commitment to diversify products and provide investors with unique investment and hedging opportunities," said Hamed Ali, CEO of DFM. "This is in line with our concerted efforts to bring innovative products to market to increase retail and institutional investor participation while increasing the depth and breadth of the market."