11.26 AM Friday, 29 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:56 06:10 12:26 15:53 18:37 19:52
29 March 2024

Nasdaq Dubai to open equities futures market

Published
By Reuters

The Nasdaq Dubai exchange will open an equity futures market next month to trade single-stock futures on the shares of some of the United Arab Emirates' biggest companies, the bourse's chief executive said on Monday.

The introduction of stock futures could be a major development for equity markets in the UAE, where short-selling is restricted and a lack of opportunities to hedge has been a concern of foreign investors.

"The futures market will provide opportunities to hedge or leverage on the underlying market. We saw a gap in the market and think there is good demand," Hamed Ahmed Ali said in a telephone interview.

From September 1, Nasdaq Dubai will initially trade futures -- agreements to buy or sell shares at an agreed price on a future date -- in 10 UAE stocks which accounted for about 55 per cent of the traded value of all listed equities in the country.

The 10 stocks are Aldar Properties, Arabtec, Damac Properties, DP World, Dubai Islamic Bank, Dubai Parks and Resorts, Emaar Properties, Etisalat, First Gulf Bank  and Union Properties.

Futures contracts will have maturities of one, two or three months and be settled in cash. Each contract will provide exposure to 100 underlying shares, with Shuaa Capital providing market-making services.

Ali said Nasdaq Dubai aimed eventually to develop futures based on UAE stock indexes as well as single-stock futures on shares of other countries in the region.