Dubai Financial Market launches futures contract

Move aims to internationalise Dubai’s financial markets and promote market liquidity and depth

The Dubai Financial Market. Trading futures contracts on the DFMGI offers investors the opportunity to access one of the best performing indices. — KT file

By WAM

Published: Mon 29 May 2023, 2:30 PM

The Dubai Financial Market (DFM) on Monday announced the offering of futures contracts on its General Index (DFMGI), which includes the most liquid and largest companies listed on the DFM. The listing and trading of DFMGI futures will commence today.

Trading futures contracts on the DFMGI offers investors the opportunity to access one of the best performing indices in the world comprising DFM’s largest and most liquid stocks, including the recently successfully listed Empower, Dewa, Salik, and others, as well as the region’s leading blue-chip companies such as Emaar and Aramex.

DFMGI will provide strong diversification and hedging opportunities for both retail and institutional investors and drive more professional investors’ participation in the marketplace.

DFMGI futures are DFM’s latest innovative offering to internationalise Dubai’s financial markets and promote market liquidity and depth. They allow investors to make gains when the index falls and rises and magnify gains through the use of leverage.

Hamed Ali, CEO of DFM, said: “The launch of DFMGI Future is further evidence of our commitment to diversify products and provide investors with unique investment and hedging opportunities. 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.”

The DFMGI has posted robust growth of 4.4 per cent last year, followed by a strong growth of 6.14 per cent from the beginning of 2023 till May 2023.

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 contract will help investors effectively hedge against market volatility and make profitable trades.

The DFMGI tracks key sectors such as financials, industrials, real estate, utilities, communication services, transportation, among others.