The Abu Dhabi Securities Exchange (ADX) has revealed the offering of futures contracts on the FTSE ADX 15 (FADX 15) index for trading on its financial derivatives platform.
The futures are the first index derivatives to be listed on ADX, and are part of the exchange’s efforts to bolster market liquidity and attract more global investors.
FADX 15 Futures are cash-settled contracts that will replicate the price performance of the benchmark FADX 15 index, which comprises the most liquid and the largest 15 companies listed on the ADX main market, Wam reported.
Each FADX 15 Index futures contract is equivalent to the dirham value of the FADX 15 index.
Launched in March 2022 with the aim of supporting the derivatives market, exchange traded funds (ETFs), and other index tracking products, the FADX 15 selects companies by free float adjusted market capitalisation and median trading value.
The introduction of FADX 15 futures will provide a new way for investors to trade equities listed on ADX’s main market, facilitating risk management for portfolio investors during periods of market volatility.
Saeed Hamad Al Dhaheri, managing director and chief executive officer (CEO) of ADX, said the launch of FADX 15 Index futures would increase opportunities for investors and traders to gain two-way market exposure, while enhancing their hedging and leveraging capabilities.
“The roll out of a wider array of products on our derivatives market continues to reflect our commitment to meet the evolving needs of sophisticated market participants and attract global institutional investors,” Al Dhaheri said.
He said ADX was looking forward to deepening its partnership with FTSE Russell to create more indices that will support the ‘ADX One’ strategy of enhancing market liquidity and providing unique growth opportunities.
Arne Staal, CEO, FTSE Russell, said the new contract – FADX 15- would facilitate market access for international investors and enhance transparency, governance, and efficiency for the UAE capital markets.
“Our collaboration with ADX confirms FTSE Russell’s commitment in enabling Middle Eastern financial markets to innovate and meet the growing demand for open access to data, pricing, and performance metrics. We are delighted to work closely with ADX and we look forward to announcing a range of new benchmarks in the coming months,” Staal said.
ADX launched its derivatives market in November 2021, when trading in the single equity futures of Etisalat, First Abu Dhabi Bank, International Holding Company, ADNOC Distribution and Aldar Properties commenced.
The exchange’s derivative market posted over 950 percent increase in the value of trades during January-May this year.
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