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Nasdaq Dubai inks derivatives deal with MSCI

Licensing agreement follows popular demand by brokers helping global institutional investors manage UAE-focused portfolios

Gulf News

Dubai: Nasdaq Dubai has signed a licence agreement with index provider MSCI to create derivative products that will be traded on the Nasdaq Dubai derivatives platform.

The exchange initially plans to develop futures contracts based on the MSCI UAE Index, which is widely tracked by international institutional investors, the bourse said in an emailed statement on Tuesday.

The development is significant in the light of the growing importance of the region as an attractive investment destination for international investors seeking exposure to high-growth emerging markets such as the UAE.

“As we successfully completed the first year of trading single stock futures on our derivatives platform, we are keen to move to the next phase of growth and introduce index futures. The MSCI licence is in response to popular demand from our institutional brokers who help global institutional investors manage UAE-focused portfolios,” Hamed Ali, chief executive of Nasdaq Dubai, said.

“Over the next couple of years, we look forward to working closely with leading capital market entities to introduce more regional index products enabling multiple opportunities for our participants. We are in discussion with potential international General Clearing Members to ensure that international institutional investors have seamless access to these products on our platform,” Ali said.

Futures on the MSCI UAE equity index, to be introduced subject to regulatory approval, will enable easy portfolio replication and hedging by global fund investors having UAE investment mandates.

The products will present attractive new opportunities to regional as well as international investors.

Nasdaq Dubai’s futures market currently comprises single stock futures on 13 leading UAE-listed companies. More than 2.5 million futures have traded since the market opened in September 2016.

The volume of traded contracts rose 80 per cent from 874,000 in the first six months of the market’s operation to reach 1,574,000 in the six-month period ended August 31, 2017.