Nasdaq Dubai, a stock exchange operating in the Dubai International Financial Centre (DIFC), has admitted brokerage SHUAA Securities to trade on its equity derivatives market.
The exchange’s equity derivatives market is currently the only one operating in the United Arab Emirates (UAE). It traded a total of 125,000 contracts in 2009, 73% of which were traded in the second half of the year. In January 2010, 6,290 equity derivatives were traded, a 55% decrease from December’s total of 14,100.
“The growth of NASDAQ Dubai’s equity derivatives market over the past year marks an exciting new phase in the development of the Middle East’s capital markets,” commented Mohammed Ali Yasin, CEO, SHUAA Securities. “We believe that by adding this product offering we will be able to cater to the increased requirements of our clients as part of the continuous development of the financial markets in the region.”
“Equity derivatives play a major risk management role in capital markets around the world and there is enormous potential for growth in the Middle East, where the sector is in its infancy,” added Jeff Singer, CEO of Nasdaq Dubai. “Nasdaq Dubai provides investors with the security of a well regulated on-exchange environment, in which trading volumes are transparent and clearing is conducted through the exchange, which acts as a central counterparty to all trades.”
The exchange’s equity derivatives offering currently consists of futures based on 21 UAE companies listed on Nasdaq Dubai and fellow UAE stock exchanges the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange, as well as futures on the FTSE Nasdaq Dubai UAE 20 index.
Nasdaq Dubai’s equity trading volumes rose by 17% to 200 million in January 2010 compared to January 2009’s total of 171 million. The most active members were Deutsche Bank, Citi and pan-regional brokerage house EFG-Hermes.
In December last year, the DFM, a state-owned exchange group, agreed a deal to purchase Nasdaq OMX’s one-third stake in Nasdaq Dubai. In return, Nasdaq OMX will receive a 1% stake in the new larger DFM. The deal is subject to regulatory approval. SHUAA Securities is the brokerage arm of SHUAA Capital International, a financial institution based in the DIFC.