Dubai bourse launches futures contracts on general index

Dubai Financial Market (DFM) has launched futures contracts on its General Index (DFMGI), which includes the most liquid and largest companies listed on the stock exchange.

Trading futures contracts offer investors the opportunity to access one of the best-performing indices in the world comprising DFM’s largest and most liquid stocks, including Empower, DEWA, SALIK and the region’s leading blue-chip companies such as Emaar and Aramex.

DFMGI futures are the stock exchange’s latest innovative offering to internationalise Dubai’s financial markets and promote market liquidity and depth. The futures will offer strong diversification and hedging opportunities for both retail and institutional investors while boosting professional investors’ participation in the marketplace.

“The launch of DFMGI futures is further evidence of our commitment to diversify products and provide investors with unique investment and hedging opportunities,” said Hamed Ali, CEO of DFM. “This is in line with our concerted efforts to bring innovative products to market to increase retail and institutional investor participation while increasing the depth and breadth of the market.”

#DubaiFinancialMarket today announced the launch of its new financial product, #DFMGI Futures, which includes the most liquid and largest companies listed on the #DFM. pic.twitter.com/D0wEeVQKjn

— Dubai Financial Market (@DFMalerts) May 29, 2023

The index posted a robust performance of 4.4 per cent in 2022, which was followed by a strong growth of 6.14 per cent year to date (YTD). The DFMGI futures closely track the underlying price performance of the DFM General Index, which in turn provides a benchmark for the overall performance of the exchange.

The futures contracts will help investors effectively hedge against market volatility and make profitable trades.

Dubai draws foreign investors

Meanwhile, DFM has unveiled several initiatives to support private and state-owned entities on their path to an initial public offering (IPO). The Dubai government approved the establishment of a $545m (Dhs2bn) market-maker fund in November 2021 to encourage more domestic listings.

The city is also launched a Dhs1bn fund to encourage tech companies to list on Dubai’s stock market. UAE money exchange and remittance firm Al Ansari Financial Services, which was listed on the DFM in April, is one of the first family-owned businesses to go public in the UAE.

Dubai listed three state-linked entities – DEWA, TECOM and SALIK – out of the 10 that are set to IPO on the DFM as part of a programme aimed at attracting investor interest in the domestic stock exchange.

The exchange is reportedly in talks with companies planning dual listings to attract both foreign and local investors. The dual-listing plan follows the success of such a deal in the GCC region late last year when Americana Restaurants International raised $1.8bn in a share sale in Abu Dhabi and Riyadh.

Read: Dubai-based owner of Dubizzle mulls UAE IPO