The Abu Dhabi Securities Exchange (ADX) has launched FADX 15 futures contracts trading on its derivatives platform.
The futures, based on the FTSE ADX 15 (FADX 15) Index, are the first index derivatives to be listed on the ADX as the exchange accelerates efforts to bolster market liquidity and attract more global investors. The FADX 15 futures are cash-settled contracts that will replicate the price performance of the benchmark FADX 15 Index, which comprises the most liquid and the largest 15 companies listed on the ADX main market.
Launched in March 2022 to support the derivatives market, Exchange Traded Funds, and other index-tracking products, the FADX 15 selects companies by free float-adjusted market capitalization and median trading value. The move will provide a “new way for investors to trade equities listed on ADX’s main market, facilitating risk management for portfolio investors during periods of market volatility”, the exchange said.
Saeed Hamad Al Dhaheri, managing director and chief executive officer (CEO) of Abu Dhabi Securities Exchange, said the launch of FADX 15 Index futures will increase opportunities for investors and traders to gain two-way market exposure while enhancing their hedging and leveraging capabilities. “The roll-out of a wider array of products on our derivatives market continues to reflect our commitment to meet the evolving needs of sophisticated market participants and attract global institutional investors,” Mr. Al Dhaheri said. “We look forward to deepening our partnership with FTSE Russell to create more indices that will support the ‘ADX One’ strategy of enhancing market liquidity and providing unique growth opportunities.”
Arne Staal, the CEO, of FTSE Russell, said: “We congratulate ADX on the launch of the FADX 15 Index Futures. This contract will facilitate market access for international investors and enhance transparency, governance, and efficiency for the UAE capital markets. Our collaboration with ADX confirms FTSE Russell’s commitment to enabling Middle Eastern financial markets to innovate and meet the growing demand for open access to data, pricing, and performance metrics. We are delighted to closely work with ADX and we look forward to announcing a range of new benchmarks in the coming months.”
FTSE Russell, wholly owned by London Stock Exchange, is a global provider of benchmarks, analytics, and data solutions with multi-asset capabilities. The Abu Dhabi bourse is the first exchange in the region to use FTSE Russell as its index administrator. The partners are developing and launching new indexes to support the growth of ADX.
ADX launched its derivatives market in November, when trading in the single equity futures of Etisalat, First Abu Dhabi Bank, International Holding Company, Adnoc Distribution, and Aldar Properties started. The value of trades on the derivatives market surged by “more than 950 percent” from the beginning of the year to the end of May, the bourse said.