Index comprises some of the largest firms in the UAE including DP World, Emaar Properties and First Abu Dhabi Bank
Nasdaq Dubai on Tuesday launched futures trading on the MSCI UAE equity index, in the latest expansion of the exchange’s futures market.
The contracts are designed to appeal to international and regional investors seeking exposure to leading UAE companies.
Robert Ansari, executive director - head of the Middle East of MSCI, rang the market-opening bell at Nasdaq Dubai MarketSite to celebrate the start of trading.
The index comprises 11 companies that are among the largest and most liquid in the UAE including DP World, Emaar Properties and First Abu Dhabi Bank.
The introduction of MSCI UAE index futures comes one week after Nasdaq Dubai launched single stock futures trading on 12 Saudi Arabian companies.
Essa Kazim, governor of Dubai International Financial Centre and chairman of Dubai Financial Market, said: “The launch of futures on MSCI’s UAE index is the latest step in Dubai’s strategy of expanding the range of its capital markets product offerings, to cater for diverse segments of investors. We will maintain our focus on creating new ways to attract capital into the UAE and the region.”
Ansari added: “We are delighted to work with Nasdaq Dubai as it expands its futures market across the region and attracts global investors to the Middle Eastern capital markets. This agreement will allow a wide range of international and regional investors to access Nasdaq Dubai contracts on the MSCI United Arab Emirates Equity Index.”
The futures on the MSCI UAE index were launched under a licence agreement signed in 2017, under which Nasdaq Dubai can also create futures on other regional MSCI indices.
Hamed Ali, chief executive of Nasdaq Dubai, said: “The addition of the benchmark MSCI UAE equity index is a significant step that will bring further investment into the region from global institutional investors seeking contracts with a strong emphasis on liquidity and investability. In response to increasing demand from brokers and investors, we will introduce more regional MSCI index products to enable a range of opportunities for our market participants.”
More than $11 trillion in assets under management is estimated to be benchmarked to MSCI’s indexes worldwide.
By trading futures investors can make use of leverage to magnify the outcome of their trades and make gains whether the index rises or falls.
Nasdaq Dubai’s derivatives market opened in 2016 and also comprises single stock futures on 29 leading UAE-listed and Saudi-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 said it is preparing to add a range of further regional equity futures and options.