The FTSE NASDAQ Dubai UAE 20 share index extended its run of recent gains last week to close 23.3% higher than at the end of 2011.
The index, which tracks 20 liquid stocks listed on Dubai Financial Market, the Abu Dhabi Securities Exchange and NASDAQ Dubai, ended at 1,694 on March 15, 2012, up from 1,374 on December 31, 2011.
The rise reflected the strong increase in UAE share prices this year. On other international markets, the FTSE 100 rose 6.7% over the same period, the NASDAQ Composite 16.7% and the Hang Seng index 15.8%.
The FTSE NASDAQ Dubai UAE 20 index was created jointly by FTSE International and NASDAQ Dubai as an investment and risk management tool. In 2008 NASDAQ Dubai created futures contracts on the index giving market participants the opportunity to benefit from price movements in the underlying shares. These equity derivatives are tradable on the exchange and cleared through the NASDAQ Dubai central securities depositary which ensures that any counterparty risk is mitigated via the exchange’s best in class clearing system.
Craig Hewett, Head of Business Development at NASDAQ Dubai, said: “Futures on the FTSE NASDAQ Dubai UAE 20 index can serve as an excellent hedging mechanism for investors in the UAE and other Middle East markets as well as providing investment opportunities based on the performance of underlying UAE stocks. The development of an equity derivatives market can also increase trading in the underlying shares. NASDAQ Dubai looks forward to significantly expanding its equity derivatives market in 2012 in conjunction with new and existing market participants.”
Jonathan Cooper, Managing Director, Middle East & Africa at FTSE Group said: “The FTSE NASDAQ Dubai UAE 20 index has been designed to offer a broad based investment opportunity for both GCC and international investors. The creation of tradable futures contracts on the index further enhances the inward investment flows into the region and the growth of regional capital markets.”
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