Dubai's DFM to launch new equity derivatives platform

New initiative to enable investors to diversify portfolio

  
A man stands near to a logo of the Dubai Financial Market in Dubai, United Arab Emirates, January 8, 2020.

A man stands near to a logo of the Dubai Financial Market in Dubai, United Arab Emirates, January 8, 2020.

REUTERS/Christopher Pike

The Dubai Financial Market (DFM) is set to launch a new platform for equity derivatives as part of its strategy to diversify its product offerings.

The DFM Derivatives Platform is scheduled to go live on October 2020 and it will introduce equity futures contracts on single stocks with tenures of one, two and three months, enabling investors to diversify their portfolios.

In a statement on Tuesday, the DFM said it is now on the final stages of its preparations to make the launch. The inaugural contracts will feature five of the most liquid equities listed on DFM, including Emaar Properties, Dubai Islamic Bank, Emirates NBD, Emaar Development and Emaar Malls.

“As part of DFM’s constant efforts to diversify its product offerings, we are leveraging the vast experience and capabilities of DFM Group’s members, including DFM, Dubai Clear and Nasdaq Dubai, to launch a comprehensive derivatives platform as a key milestone in DFM’s momentous journey,” said Essa Kazim, chairman of DFM.

“The platform will play an essential role in broadening and deepening the market, adding new impetus to Dubai’s leading position as a dynamic capital markets hub,” he added.

Hassan Al Serkal, CEO of DFM said that leading brokerage firms have already shown enthusiasm to join the platform as “launch partners”.

“DFM’s diverse investor base represents 207 nationalities and the derivatives platform will enable them to diversify their portfolios, manage risk and gain from the leverage,” said Al Serkal.

Al Serkal said they have developed a “robust” regulatory framework that is in line with global best practices in order to create a favourable environment for investors and licensed brokers to participate actively in futures trading and market making.

To be able to trade equity contracts, investors can open an account with a DFM-licensed derivatives member.

Both brokers and investors can join in a series of webinars and awareness sessions to learn more about the contracts, trading rules and clearing arrangements in the new platform.

(Writing by Cleofe Maceda; editing by Seban Scaria)

Cleofe.maceda@refinitiv.com

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© ZAWYA 2020

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