Nasdaq Dubai launches futures trading on first Saudi firms

Bourse says move represents a significant step forward for the region's capital markets
Nasdaq Dubai launches futures trading on first Saudi firms
The move enables investors to gain from changes in the Saudi-listed companies’ share price by trading the futures on Nasdaq Dubai.
By Sam Bridge
Wed 09 Jan 2019 02:40 PM

Nasdaq Dubai on Wednesday launched futures trading on the shares of 12 Saudi Arabian companies in a significant step forward for the region’s capital markets.

The move enables investors to gain from changes in the Saudi-listed companies’ share price by trading the futures on Nasdaq Dubai.

Nasdaq said the futures are designed to increase the appeal of regional markets to international investors. They can be used as tools for hedging existing positions or taking a view on market movements, with leverage to maximise the outcome of their trades. Investors can make gains from futures whether the underlying share prices rise or fall.

The 12 companies, which are listed on the Saudi Stock Exchange (Tadawul), have a combined market capitalisation of $212 billion and include Saudi Basic Industries Corporation (SABIC), Al Rajhi Bank, Alinma Bank, Almarai Company, Dar Al Arkan Real Estate Development Company, Etihad Etisalat Company, Rabigh Refining and Petrochemical Company, Saudi Arabian Mining Company, Saudi Cement Company, Saudi Electricity Company, Saudi Kayan Petrochemical Company and Altayyar Travel Group.

Essa Kazim, governor of Dubai International Financial Centre (DIFC) and chairman of Dubai Financial Market (DFM), rang the market-opening bell at Nasdaq Dubai MarketSite to celebrate the start of Saudi futures trading.

He said: "The launch of Saudi equity futures in Dubai is a milestone for investors that creates new opportunities for them to play an active role in the region’s dynamic economy. Dubai will continue to strengthen its capital markets connections regionally and globally as well as its product offerings catering for all segments of the market."

Abdul Wahed Al Fahim, chairman of Nasdaq Dubai, added: "Our Saudi equity futures market is built on collaboration with a wide variety of regional and international market participants as well as extensive analysis of investors’ needs. Together we have created a market that offers easy access and efficiency combined with excellent trading and post-trading services."

Nasdaq Dubai first announced its plans to launch Saudi equity futures in May 2018. The futures are traded on Nasdaq Dubai in Saudi riyals, which is the currency of the underlying shares.

The exchange launched UAE futures trading in 2016 with single stock futures on seven companies. With more UAE companies added since then plus today’s addition of the Saudi contracts, Nasdaq Dubai now offers single stock futures on a total of 29 regional companies.

In 2018 the exchange also added futures on Dubai Financial Market’s DFMGI share index as well as the ADI index of Abu Dhabi Securities Exchange. It will add futures on MSCI’s UAE share index later this month.

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