Nasdaq Dubai announced on Wednesday that it will launch trading in futures on the MSCI United Arab Emirates (UAE) equity index on January 15.
This opens a new route for investors to gain exposure to the performance of UAE companies, a statement said.
The index is a benchmark that is widely watched by investors around the world. It currently comprises 11 constituent companies that are among the largest and most liquid in the UAE including DP World, Emaar Properties and First Abu Dhabi Bank.
By trading the index futures, investors can hedge their positions, make use of leverage to magnify the outcome of their trades, and make gains whether the index is rising or falling, it added.
Hamed Ali, chief executive of Nasdaq Dubai, said: “Launching contracts on MSCI’s highly respected United Arab Emirates (UAE) equity index is an important step in the rapid expansion of Nasdaq Dubai’s equity derivatives market.
"It will encourage further participation from international and regional funds and other investors, including individuals, who are looking for new and attractive opportunities to increase their exposure to the UAE’s investment landscape.”
Robert Ansari, executive director - Head of the Middle East of MSCI added: “We are delighted to continue our partnership with the Nasdaq Dubai through the launch of futures trading on the MSCI UAE equity index.
"The index is designed and maintained with a transparent methodology which seeks to strike the balance between representation of the UAE equity opportunity set whilst remaining faithful to need for investablity. The ability for local and global institutional investors to access the equity markets through financial instruments continues to grow and we look forward to working with Nasdaq Dubai as these needs evolve.”
The futures on the UAE index will be launched under a licence agreement agreed in 2017. The licence also enables Nasdaq Dubai to launch futures and options in due course on MSCI indices of a number of GCC and regional equity markets.
More than $11 trillion in assets under management is estimated to be benchmarked to MSCI’s indexes worldwide.
Nasdaq Dubai’s derivatives market opened in 2016 and currently comprises single stock futures on 17 leading UAE-listed companies, as well as futures on Dubai Financial Market’s DFMGI share index and the ADI index of Abu Dhabi Securities Exchange.
Nasdaq Dubai is also preparing to launch single stock futures on companies listed on the Saudi Stock Exchange (Tadawul).
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