Abu Dhabi Stock Exchange Launches Derivatives Market

“With the launch of single equity futures, the new market will give investors and traders the opportunity to benefit from increased leverage, two-way market exposure, and hedging capabilities,” the Abu Dhabi Securities Exchange (ADX) said in a statement.

ADX, the second largest bourse in the region after Saudi Arabia’s Tadawul, has seen a string of new listings this year, including its largest ever, ADNOC Drilling, owned by state-owned oil heavyweight Abu Dhabi National Oil Company.

Single equity futures trading began on Thursday for Etisalat , First Abu Dhabi Bank, International Holding Company, ADNOC Distribution and Aldar Properties. More securities will be added this year and next year, ADX said.

“Index futures will be introduced in the first quarter of 2022, ahead of the expansion into a wider range of derivative products,” ADX said, adding it was using technology from Nasdaq for the derivatives market.

“Three market makers including (state investor) ADQ’s Q Market Makers, BHM Capital, and Al Ramz Capital join the ADX Derivatives market to provide liquidity on the new platform, facilitating an efficient and orderly market.”

Short-term margin trading licenses will be given to more brokerages, ADX added.

ADX has surged 59% this year, with its market capitalisation now at 1.36 trillion AED ($370.31 billion). Tadawul’s market cap is at 10.45 trillion riyals ($2.79 trillion).

The main index of fellow emirate Dubai, the commercial hub of the United Arab Emirates of which Abu Dhabi is the capital, has risen nearly a quarter this year, with a market cap of 333.9 billion dirhams.

Last month, Abu Dhabi launched a 5 billion dirham IPO fund that will invest in five to 10 private companies a year with a focus on small and medium enterprises (SMEs) and a targeted ticket size of 10-40% of the float.

($1 = 3.6726 UAE dirham)

($1 = 3.7510 riyals) .

(Reporting by Yousef Saba Editing by Raissa Kasolowsky)