DIFX poised to launch derivatives trading in Nov

DIFX DERIVATIVES: Dubai bourse is set to launch derivatives trading in November. (Getty Images)

Dubai International Financial Exchange (DIFX) is on track to launch derivatives trading in November in a bid to attract international players to invest and also list on the bourse, its chief executive said on Tuesday.

The first derivatives product will be a futures contract based on the DIFX UAE FTSE 20, followed by futures on individual shares and stock options next year, Jeffrey Singer said at Reuters Middle East Investment Summit.

"You won't attract the large sophisticated international institutions without providing price insurance. You have to give them a way to constantly hedge their positions and the way you do that is through a derivatives market," he said.

"We're not going to do complex types, we're going to be sure we're not releasing products the investment community does not understand."

Asked what the prospects for consolidation among regional bourses are, he said, "as far as I can tell, the market is not ready for a consolidation," adding that when he felt the DIFX was ready and needed a merger for growth, he would recommend it to its shareholders.

Dubai, a financial and real estate hub trumpeted as Singapore of the Middle East, set up the DIFX in 2005 to encourage local companies to sell shares to the public and for foreign companies to tap regional wealth.

The exchange, where trading is dominated by institutions and until recently done only in dollars, has announced a slate of reform measures to beef up liquidity by luring retail investors and attracting more primary and secondary listings.

The exchange now allows companies seeking listing to do so in dirhams while those already listed in dollars would have the choice to revert to dirhams, pending shareholder approval. (Reuters)

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