Nasdaq Dubai and FTSE Russell to launch Saudi derivatives index

Parties sign agreement to enable derivatives trading from later this month

  DIFC-based Nasdaq Dubai and index provider FTSE Russell plan to launch a Saudi derivatives index later this month. Paulo Vecina/The National

Nasdaq Dubai signed a licencing agreement to launch derivatives on index provider FTSE Russell’s Saudi Arabia equity indices later this month, as part of an expansion of its trading products, the parties said in a statement on Monday.

“Our collaboration with FTSE Russell expands the investment opportunities available to regional and international investors, introduces new product opportunities for regional markets, and complements our product offerings in Saudi Arabia,” said Hamed Ali, chief executive of Nasdaq Dubai.

The derivatives will launch on the FTSE Saudi Arabia index “later this month”, the statement said. They are designed to attract global and regional market participants including the many funds that use FTSE Russell’s indices as benchmarks for investing in Saudi equities.

The launch is subject to regulatory approval. Other derivatives are set to be launched in the coming months, the parties said.

Nasdaq Dubai is expanding and diversifying its portfolio of products to boost liquidity and attract new investors.

In January, it added Saudi equity futures for 12 Saudi companies, bringing the total number of single stock futures trading on the bourse to 29, including 17 of the biggest UAE companies.

The exchange last year introduced futures on Dubai Financial Market and the ADI index of the Abu Dhabi Securities Exchange.

Other assets classes, including equities, bonds, real estate investment trusts (Reits), and sukuk are already trading on Nasdaq Dubai.

FTSE Russell announced last March that Saudi Arabia would be promoted to Emerging Markets status in its global equity benchmarks from March 2019.

“As investors prepare for the inclusion of Saudi Arabia into FTSE Russell’s global equity benchmarks, we are delighted to collaborate with Nasdaq Dubai to enable the launch of Saudi index futures,” said Waqas Samad, chief executive of FTSE Russell.

“Saudi equities are some of the most heavily traded of all the region’s markets, and the futures contracts are an important additional tool to give regional and international investors efficient access to this dynamic market.”

The FTSE Saudi Arabia Index contains 46 companies listed on the Tadawul stock exchange including Saudi Basic Industries Corporation (Sabic) and the kingdom’s largest lender by market value, Al Rajhi Bank.