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Dubai / Reuters
The Nasdaq Dubai exchange began trading single-stock futures on shares in some of the UAE’s biggest companies on Thursday, a step towards drawing fresh money into UAE equity markets.
Nasdaq Dubai’s standardised, exchange-listed futures, or agreements to buy or sell shares at an agreed price on a future date, are cheaper to trade and more transparent, giving investors a clearer idea of price direction while helping UAE regulators monitor derivatives activity affecting stocks.
Trade was thin on Thursday as only a small number of investors entered the futures market on its first day, but market participants said the trading system was working smoothly. Shuaa Capital is market-maker for the futures.
“We don’t expect big volumes in the first few days or weeks but it’s a process of education – volumes will increase in coming months as investors become familiar with the futures,†said Racha Alkhawaja, head of institutional coverage at Mena Corp Financial Services, one of the brokers for the futures.