Abu Dhabi Securities Exchange (ADX) and Nasdaq Dubai have signed an agreement to develop and launch an Index Futures contract based on the Abu Dhabi General Index (ADI) on Nasdaq Dubai’s derivatives platform.

ADX is a market for trading securities; including shares issued by public joint stock companies, bonds issued by governments or corporations, exchange traded funds, and any other financial instruments approved by the UAE Securities and Commodities Authority (SCA).

The ADI indicates the performance of ADX listed stocks and is widely tracked by the investment and trading community locally and internationally.

The ADI’s value has risen by 70 per cent in the last 5 years. It tracks the performance of companies from multiple sectors such as telecommunication, financial services, real estate, energy and more, providing a good benchmark of the overall performance of the ADX market.

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.

It currently lists shares, derivatives, Sukuk (Islamic bonds), conventional bonds and Real Estate Investment Trusts (REITS).

Additionally, the two exchanges signed a memorandum of understanding focusing on further collaboration in terms of developing the local capital market, and jointly focusing on regional and local investor awareness programs about the new product offering through extensive educational workshops.

Rashed Al Blooshi, the chief executive of ADX, said: "One of the most important objectives for ADX within its strategic plan 2016-2020 are to attract and activate a wider range of investors, and increase market cap and product range."

"In addition, attracting foreign investment is one of the main projects in ADX’s plan, and thus these objectives have led us to the development of an attractive offer for investors including a stable trading environment, innovative products and services, and the adoption of best international practices in terms of disclosure, transparency, corporate governance and investor relations," observed Al Blooshi.

"Signing the agreement with Nasdaq Dubai underscores local and global investments communities’ trust in the quality of the global standards adopted by ADX particularly those in terms of measuring the overall performance of listed shares," he added.

Nasdaq Dubai CEO Hamed Ali said: "The introduction of index futures is a significant step in the evolution of the UAE capital markets and we are delighted to join hands with ADX to bring the benchmark ADI Futures on our derivatives platform."

"Index futures is a universal choice with market participants in an evolving derivatives marketplace and we believe this partnership will enable new opportunities for investors and lead to the development of UAE capital markets," he added.

Nasdaq Dubai’s derivatives platform currently comprises single stock futures on 13 leading UAE-listed companies. More than 2.5 million future contracts have traded since the market opened in September 2016.

Subject to regulatory approval ADI futures are expected to be traded later this year with the support of leading UAE brokers and targeted at professional and institutional investors enabling them to take a macro view on the ADX market.-TradeArabia News Service