Derivative markets in the Middle East remain small by global standards. Yet the most successful products are growing strongly. And, as Hugo Cox reports, this is just the beginning.
Never has the need for a mature derivatives industry in the
Middle East looked greater.
The request by Dubai World, the Gulf’s largest
state-owned conglomerate, for a six month moratorium on
servicing its debts on November 25 shocked world markets,
tipping the FTSE 100 into its largest single day loss since
As investors exposed to the region scrambled to hedge
themselves against further bad news, they may have noticed that
the region’s stock exchanges offer virtually no
suitable derivative instruments.
The inadequacy of local risk management routes looks stark
in the light of the extreme challenges faced by investors in
Dubai. Yet across the entire region, only one exchange, Nasdaq
Dubai, offers equity or index futures. And these are limited to
one future on the FTSE Nasdaq Dubai UAE 20 index, and a small
clutch of futures on 20 UAE stocks.
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