The Abu Dhabi Securities Exchange (ADX) is celebrating a year of unprecedented success for its derivatives trading market.
In just 12 months since its launch in November 2021, the ADX derivatives market has grown to become the most liquid derivatives market in the Arab region, while being the youngest. In its first year, it has achieved AED 1 billion in traded value, over 1 million contracts traded – over 100% more than peers in the region.
The exchange launched with an initial five single stock futures: Etisalat, First Abu Dhabi Bank, International Holding Company, ADNOC Distribution and Aldar Properties. This was followed in June 2022 by the launch of futures contracts on the FTSE ADX 15 (FADX 15) Index, which is one of the best performing indices in the MENA region. In October of this year, ADX added another 5 single stock futures bringing the total number of traded derivatives to 11.
The derivatives market was introduced to provide investors and traders with access to two-way market exposure, while providing for hedging and leveraging capabilities. It has rapidly become one of the most active in the region due to a blend of strong partnerships and world class infrastructure. It uses central counterparty clearing (CCP) to promote clearing efficiency, stability, and confidence in the market. In addition, market makers continue to provide liquidity, facilitating an efficient and orderly derivatives market.
Saeed Hamad Al Dhaheri, Managing Director and Chief Executive Officer of ADX, said: “I am immensely proud of what the ADX derivatives market has achieved in only its first year of trading. Launching the market was a significant milestone for our young and fast-growing exchange. We are continually working on introducing new products on our derivatives platform and expect trading to expand further in the coming months, as ADX continues to be a vibrant trading hub for both investors and issuers.”
The launch of the derivatives market is part of the exchange’s strategy to develop Abu Dhabi’s capital markets and bring its products and services in line with global peers. The strategy aims at encouraging the listings pipeline, enhancing corporate governance and introducing new products and services that meet the requirements of issuers and global investors.