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ADX launches FADX 15 Futures, the exchange’s first index derivatives

FADX 15 Futures offer investors a new way of investing on the ADX market

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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.

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. Each FADX 15 Index futures contract is equivalent to the dirham (AED) value of the FADX 15 index.

Launched in March 2022 with the aim of supporting 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 introduction of FADX 15 futures 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.

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. 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,” he said.

ADX launched its derivatives market in November 2021, when trading in the single equity futures of Etisalat, First Abu Dhabi Bank, International Holding Company, Adnoc Distribution and Aldar Properties commenced. The value of trades on the derivatives market increased by more than 950% from beginning of the year to end of May.

Arne Staal, CEO, 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 in 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.”

The ‘ADX One’ strategy was launched at the start of 2021 and aims to bring a broader offering of products and services to market, along with state-of-the-art infrastructure in partnership with global market leaders. The market capitalisation of the exchange recently exceeded Dh2 trillion for the first time, supported by a series of listings and increased international investment. At the same time, the FTSE ADX 15 Index (FADX 15) is up 14 per cent year to date, making it one of the best performing equity indexes in the world. ussell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants.

FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.

FTSE Russell is wholly owned by London Stock Exchange Group.

— muzaffarrizvi@khaleejtimes.com