NASDAQ Dubai

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NASDAQ Dubai (formerly Dubai International Financial Exchange)
Nasdaq dubai logo.gif
Founded 2005
Headquarters Dubai, UAE
Key People Jeff Singer, CEO; Soud Ba’alawy, Chairman
Products Cash equities, bonds and structured products
Website http://www.difx.ae

NASDAQ Dubai is the new name of the former Dubai International Financial Exchange (DIFX), which was launched in September of 2005 as an electronic platform to attract primary share listings and trade equities, Islamic bonds and structured products.

While a global leader in the listing of Islamic Sukuk bonds - with a value of $13.8 billion - the exchange struggled to attract stock listings and liquidity, leading its state-backed owners to restructure the company and its sister platform - the Dubai Financial Market - under the umbrella of Borse Dubai.[1]

The DIFX was rebranded as NASDAQ Dubai under the terms of the deal that saw Borse Dubai and the Nasdaq Stock Market jointly acquire OMX, the Scandinavian exchange and financial services group. Nasdaq paid $50 million for a 33 percent stake in the DIFX and in July 2008 moved its SVP International Listings, Jeff Singer, to become CEO of the Dubai exchange.

The revamped exchange plans to diversify with derivatives and exchange-traded funds. The exchange launched derivatives trading on November 19, 2008, and plans to introduce both physically settled equity options and cash-settled index options in the first quarter of 2009. [2]

History and Ownership

The DIFX was created in 2005 as an international platform to attract primary stock market listings, with the state-controlled Dubai Financial Market focusing on domestic companies. Both exchanges struggled to gain traction, and were brought under the umbrella of Borse Dubai, which owns 100 percent of the DIFX, in August 2007.

The exchange is based in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority.[3]

Deutsche Bank became the first market maker on the DIFX in November of 2006, with NBD Investment Bank becoming the first regional market maker in November of 2007. The exchange now has 19 member brokers.

Clearing, settlement and depositary services are through the in-house eClearSettle, developed by TCS, with settlement on a T+3 basis. Trading is from 11:45 a.m. to 7 p.m., Monday to Friday.

Product Development

Equities The exchange offers a venue for initial public offerings, secondary listings, rights issues and deposit receipts for companies with a minimum capitalization of $250 million.

The listings business was "seeded" in October 2007 with the $5 billion flotation of DP World, a state-controlled infrastructure group. It was the first company to list exclusively on the DIFX, and the largest-ever offering in the Middle East.[4]

Fixed income Sovereign and corporate bonds, asset-backed securities and medium-term notes are available. There are also Shari'aa-compliant products: Sukuks, Islamic funds, certificates and indexes.

Indexes The FTSE/DIFX and HSBC/DIFX bond series are listed.

Derivatives The exchange launched derivatives trading on November 19, 2008. Twenty-two equity futures are listed, including the FTSE DIFX UAE 20 Index.

Partnerships

  • On January 29, 2009, NASDAQ Dubai and The Options Industry Council (OIC) signed a licensing agreement to develop an equity options education program for Middle East investors and financial advisors. The program will include seminars run by NASDAQ Dubai Academy explaining equity options for institutional and individual investors, as well as brokers.

Key People

References

  1. Press Release. Borse Dubai.
  2. Nasdaq Dubai to launch options despite slow start for futures. Futures and Options Intelligence.
  3. Guide to the DIFX. DIFX.
  4. DP World raises $5bn. Financial Times.