ICE Futures Abu Dhabi to launch equity derivatives in February
27th January, 2025|Luke Jeffs
ICE Futures Abu Dhabi (IFAD) plans to launch next month its first equity derivatives, diversifying the Gulf exchange from its current focus on oil.
IFAD said on Monday it plans to list on February 24 US dollar-denominated micro futures based on four MSCI indices that track blue chips in the Gulf and India.
The indices are the MSCI GCC Countries index, the MSCI Qatar index, the MSCI UAE index and the MSCI India index.
“The introduction of the new index futures marks a transformative step in advancing financial markets in the region and strengthening the connectivity with global capital flows,” said Nabeel Albloushi, head of Markets and Securities Services, HSBC Middle East, North Africa and Turkiye, which is an IFAD member. “These products will support increasing market liquidity, provide hedging solutions and empower clients locally and globally to access and manage risk.”
The move into equity derivatives, which is subject to regulatory approval, marks the exchange’s first financial derivatives after launching with crude oil futures in 2021 and the region’s second index derivatives after Saudi Arabia’s Tadawul launched its in 2020.
Albloushi said: “The MSCI UAE, Qatar, and GCC Index Futures play a key role in reinforcing the region’s financial infrastructure and allow local and international investors to be part of the journey, while the introduction of the MSCI India Index Future highlights the growing importance of the Middle East-Asia corridor, enabling investors to leverage growth opportunities in one of the largest emerging markets globally.”
Adam Kamyar, head of MENA & APAC at Winton Capital, the $13bn (£10.4bn) asset manager that opened its Abu Dhabi office in 2019, said: “We welcome ICE Futures Abu Dhabi’s expansion into regional stock indexes and further development in regional derivatives markets. The launch reflects growing investor demand for products that allow for local equity risk management across MENA and Indian markets.”
IFAD, which launched in March 2021 with Murban crude oil futures, said trading picked up last year to just over 6 million lots, up 160% on 2023.
“ICE is building on its energy offering on IFAD to serve investor demand for transparent, standardised, and flexible access to regional Gulf equity markets,” said Gary King, president of ICE Futures Abu Dhabi. “With this offering tailored for the Gulf region, ICE is connecting local and global investors, providing enhanced opportunities for strategic trading and risk management in equity markets and broadening IFAD to this new asset class.”
The Saudi Exchange launched in 2020 the region’s first equity index derivatives, referencing the MSCI Tadawul 30 Index (MT30) comprising the largest and most liquid companies in its listed market. The Saudi group also listed single stock futures referencing ten companies on July 4.
