DFM Nasdaq Dubai sign agreement to launch futures on DFM General Index

Index-linked instruments will be traded on Nasdaq Dubai’s equity futures market in a first-of-its-kind step in the region

Dubai: Dubai Financial Market (DFM) and Nasdaq Dubai have signed a licence agreement under which futures contracts linked with the DFM General Index (DFMGI) will be traded on Nasdaq Dubai’s equity futures market.

The launch of the index futures is a core element of the exchanges’ joint strategy to offer institutional and retail investors attractive new investment opportunities and a wider range of products, DFM said in a statement.

The DFMGI tracks a basket of leading DFM-listed companies, providing broad exposure to the UAE economy in vibrant sectors including property, banking, telecoms, insurance and transport. DFMGI’s value increased from its base value of 1,000 points in 2003 to a historic level of 8,485 points in November 2005. The index currently stands at 3,660 points.

“The diversification of products range and offering new investment opportunities to our enormous investor base is one of the main pillars of DFM’s strategy 2021. In this context, we believe that the launch of futures on the DFMGI will be a milestone in the development of Dubai’s financial landscape,” Eisa Kazim, Chairman of DFM, said in a statement.

DFM will introduce regulated short-selling of equities in coming period. This move will support increased liquidity in both equities and equity futures.

Nasdaq Dubai last week announced a licence agreement with MSCI under which the exchange will use MSCI’s regional indices to create derivative products to be traded on Nasdaq Dubai’s derivatives platform. The exchange initially plans to develop futures contracts based on the MSCI UAE index, which is widely tracked by international institutional investors.

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