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Equity Derivatives Market In Middle East To Regain Lost Ground: Nasdaq Dubai

The Middle East equity derivatives market is likely to expand in 2010 compared to last year’s levels, according to 79% of fund managers and brokers surveyed by Nasdaq Dubai.

The survey received responses from representatives of 40 fund managers and brokerage firms who attended the FOW Derivatives World Middle East conference in Dubai on March 16.

A total of 87% described equity derivatives as useful tools for managing risk, while 72% said their organisation was interested in learning more about the uses and benefits of equity derivatives.

A total of 93% of respondents said that Nasdaq Dubai’s trading model provides useful protection against the risk of default by a counterparty, which can affect over-the-counter trades. Nasdaq Dubai operates a central clearing house which eliminates such risk.

Jeff Singer, CEO of Nasdaq Dubai, said: “The survey shows that investors are poised to make increasing use of the Middle East equity derivatives market, which is still in its infancy and has potential for rapid growth.

“Nasdaq Dubai will continue to drive the development of the market forward, by expanding its product range and by educating finance professionals and the public about the advantages that equity derivatives offer.”

Nasdaq Dubai launched the UAE’s only equity derivatives platform in November 2008. Trading volumes have expanded from 90 in January 2009 to several thousand every week by the end of the year.

The market currently consists of futures over 21 individual UAE stocks and over the FTSE Nasdaq Dubai UAE 20 index, which is correlated with equity markets across the MENA region and offers hedging and investment possibilities.