Islamic Finance 

Nasdaq Dubai launches futures trading on shares of Saudi companies in milestone for investors in Middle East

| 09 January, 2019
  • Futures on 12 leading companies will appeal to international and regional investors
  • SABIC, Saudi Electricity Company and Almarai are among leading contracts
  • Investors can make gains whether underlying share prices rise or fall

Dubai, January 9, 2019  – Nasdaq Dubai today launched futures trading on the shares of 12 leading 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. 

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 maximize the outcome of their trades. Investors can make gains from futures whether the underlying share prices rise or fall.

The 12 companies are listed on the Saudi Stock Exchange (Tadawul) and include some of the Middle East’s largest businesses, with a combined market capitalisation of 794 billion Saudi riyals (212 billion US dollars.) They are: 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.

His Excellency 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. As well as senior representatives of Nasdaq Dubai and DFM, the ceremony was attended by leading regional brokerages.

H.E. Essa Kazim, Governor of DIFC and Chairman of DFM, 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, said: “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.”

The launch ceremony was attended by executives of leading brokerages through which investors can trade futures on Nasdaq Dubai including Integrated Securities, Brokerage House Securities, Menacorp, Al Ramz Capital, Al Safwa Mubasher, Daman Securities, EFG-Hermes UAE, Arqaam Capital and SICO UAE, as well as by Mubasher Financial Services and SHUAA Capital.   

Hamed Ali, Chief Executive of Nasdaq Dubai, said: “By providing flexibility to implement a variety of trading strategies, Saudi futures traded on Nasdaq Dubai provide investors with effective new ways to gain exposure to Saudi Arabia’s leading companies. We look forward to further developing the market in coming months and years in cooperation with market participants.”  

Nasdaq Dubai first announced its plans to launch Saudi equity futures in May 2018. The futures are traded on Nasdaq Dubai in Saudi riyals (SAR), 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 leading 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.

More market participants are preparing to join Nasdaq Dubai’s derivatives market as it expands. Beyond its existing Saudi and UAE offerings, further product additions will include futures and options based on stocks and indices of various exchanges in the MENA region. The futures market currently operates with leading GCC brokerages as Members.

 

About Nasdaq Dubai: Nasdaq Dubai is the international financial exchange serving the region between Western Europe and East Asia. It welcomes regional as well as global issuers that seek regional and international investment. The exchange currently lists shares, derivatives, Sukuk (Islamic bonds), conventional bonds and Real Estate Investment Trusts (REITS).

The majority shareholder of Nasdaq Dubai is Dubai Financial Market with a two-thirds stake.  Borse Dubai owns one third of the shares. The regulator of Nasdaq Dubai is the Dubai Financial Services Authority (DFSA). Nasdaq Dubai is located in the Dubai International Financial Centre (DIFC).

 

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