Abu Dhabi Bourse Eyes Derivatives Listing Following Its First ETF

Many companies are also lining up for IPOs in the region.

As the global financial markets are recovering from the COVID-19 slowdown, the Abu Dhabi Securities Exchange (ADX) is set to list its first exchange-traded fund (ETF) next month and also has plans for the initial public offerings (IPOs) and introducing derivatives contracts trading.

Speaking to Bloomberg, Khaleefa Al Mansouri, the chief executive of the exchange, revealed that it is already in the process of setting up a central clearinghouse that is a prerequisite for derivatives offering.

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Though the timeline is not finalized yet, he pointed out that the bourse might allow the institutions to trade futures contracts next year.

Meanwhile, the exchange is going to list its first ETF next month and Mansouri detailed that the instrument will be sharia-compliant.

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The ETF market in the Gulf region is relatively small compared to other major regions. Two ETFs with assets around $230 million are listed in Qatari bourse while in Saudi Arabia, three ETFs with assets of less than $7 million are listed.

More listings in the pipeline

The stock exchange is also considering listing several real estate investment trusts (Reits) which might take place late this year.

“We are in an active dialogue with several companies and the first one [the ETF listing] will come in August. Our target for the year [for Reit listings] was three to five Reits … on the conservative side, I would assume two [listings],” Mansouri told local news outlet The National. “I expect at least one listing of a private joint stock company in the fourth quarter.”

Due to the Coronavirus-induced slowing economy, the primary index of the ADX went down 17 percent this year, but Mansouri is expecting a recovery in late this year or the first quarter of next year. The new IPO listings, however, will be subject to market conditions.

“The market will go back…We’ll have proper time for companies to be listed in the market,” he added.

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