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As the Abu Dhabi Stock Exchange launched initiatives aimed at developing the Abu Dhabi capital market and aligning its products and services with global counterparts, the Abu Dhabi Stock Exchange launched a derivatives market. With the introduction of single stock futures, the new market will provide investors and traders with opportunities to benefit from increased leverage, two-way market exposure and hedging capabilities.
Single stock futures trading for Etisalat, First Abu Dhabi Bank (FAB), International Holding Company (IHC), ADNOC Distribution and Aldar Properties begins today, and more securities will be added later this year and in 2022. Index futures will be launched in the first quarter of 2022, before expanding to a wider range of derivatives. The derivatives market is using market technology provided by Nasdaq.
ADQ’s Q Market Makers, BHM Capital and Al RamzCapital, three market makers, joined the ADX derivatives market to provide liquidity for the new platform and promote an efficient and orderly market. Issuing short-term margin trading licenses to more brokers will increase participation. The launch of the derivatives market has been accompanied by the introduction of central counterparty clearing (CCP) to improve clearing efficiency, stability and market confidence.
His Excellency Mohamed Ali Al Shaolafa Al Hamadi, Chairman of ADX, Commented: “The launch of derivatives trading on ADX is an important milestone for our young but fast-growing exchange. The launch of stocks and index futures will support our “ADX One” strategy, which aims to provide diversification. In order to create a vibrant capital market, the exchange’s efforts to provide innovative products and services will contribute to the sustainable growth trajectory of the UAE’s economy and provide investors with more opportunities to share Abu Dhabi companies Unique growth opportunities provided.”
Saeed Hamad Al Dhaheri, CEO of ADX, Added: “The launch of derivatives marks an important new chapter in the history of ADX, providing investors with tools to trade based on their views on the direction of individual securities and indices, and to execute complex trading strategies in an effective manner. With the support of ADQ’s Q Market Makers and other market makers, these tools will be highly liquid and allow active participation. The continued development of ADX will encourage companies to raise funds to meet their needs while diversifying the investor base. We will continue to attract global investors by enhancing our technology and offering more choices of products and services.”
Magdi Shannon, General Manager of QMM, Said: “Liquidity plays an indispensable role in the successful development of Abu Dhabi’s capital market. The launch of the ADX Derivatives Exchange is an important milestone in this journey. We are ready to provide liquidity and tighten Spreads and encouraging order volume to ensure its success, thereby enhancing investors and traders’ confidence in the exchange. Market making has always been a basic part of any market infrastructure, as long as we trade financial assets, its influence will continue .”
The “ADX One” strategy was launched in early 2021 and aims to cooperate with global market leaders to bring a wider range of products and services and the most advanced infrastructure to the market. Supported by a series of listings and increased international investment, the market value of the Abu Dhabi Stock Market Composite Index has almost doubled since the beginning of the year, rising to AED 1.48 trillion. At the same time, the benchmark Abu Dhabi Composite Index (ADI) rose 56% in the first 10 months of this year, becoming one of the world’s best-performing stock indexes during the same period.
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