NASDAQ DUBAI

Single Stock Futures

LAUNCH PARTNERS

As a leader in innovation, Nasdaq Dubai’s equity futures market provides investors with attractive opportunities.

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Equity Futures: An Exciting New Market

Nasdaq Dubai’s equity futures market is opening on September 1st 2016. It enables trading of Single Stock Futures on the shares of some of the UAE’s leading and most liquid companies.

This provides a unique opportunity to international and regional investors to profit from market movements and hedge their positions.

The market is the outcome of collaboration between Nasdaq Dubai and leading capital markets participants including SHUAA Capital, which is providing market making services, and Arqaam Capital, EFG Hermes, Integrated Securities, Mena Corp Financial Services and Mubasher Financial Services as brokers.

In due course Nasdaq Dubai’s market will expand to include other derivatives products, including futures on shares listed on MENA and international markets as well as options.

Equity futures are a commitment by two parties to buy or sell a specific equity at a future date (eg one month’s time) at an agreed price.

Nasdaq Dubai Single Stock Futures are settled through cash, instead of physical delivery of the underlying equity.

Each equity futures contract gives exposure to 100 underlying shares. Settlement of price differences takes place in cash.

POTENTIAL

Share price movements create significant opportunities for investors in futures, whether share prices rise or fall.

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20M

40M

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Jun-2015 Jul-2015 Aug-2015 Sep-2015 Oct-2015 Nov-2015 Dec-2015 Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016

Pri

ce (

AE

D)

Volume

EMAAR Properties

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Underlying SharesContractSymbol

Contract Size (shares per contract) Currency Contract Expiry

Aldar Properties ALDAR 100 AED 1, 2 and 3 months

Arabtec Holding ARTC 100 AED 1, 2 and 3 months

DP World DPW 100 USD 1, 2 and 3 months

Dubai Islamic Bank DIB 100 AED 1, 2 and 3 months

Dubai Parks and Resorts DBPARK 100 AED 1, 2 and 3 months

Emaar Properties EMAAR 100 AED 1, 2 and 3 months

Emirates Telecommunications Group (Etisalat)

ETISLT 100 AED 1, 2 and 3 months

Products

Nasdaq Dubai’s Single Stock Futures market is opening with contracts on 10 UAE companies

* List of companies are subject to change

Market Maker

Brokers System Vendors

LAUNCH PARTNERS

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Trading Platform X-Stream trading platform

Currency AED or USD, same as underlying stocks traded on UAE stock markets

Contract Size 100

Maturity 1 Month, 2 Months and 3 Months. 3-Month contractswill be created each month on 2nd Thursday.

Settlement Type Cash Settled

Margin Ranges from 10%-30% of notional value

Expiration Day 3rd Thursday of each Month

Settlement Day Business Day following Expiration Day

Settlement price on Expiration Day Volume weighted average closing price of underlying equity using last 30 minutes

Trading Hours 10:00 to 14:00 Hours (please refer to trading manual for detailed trading phases)

Trading Days Sunday to Thursday

Listing of new Contract Month Thursday prior to maturity

Trading safeguards (price limits) 15% up and 10% down from previous closing price

Contract Specifications

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Leverage is a key feature of equity futures. The initial payment (called initial margin)

that an investor must make is only between 10% and 30% of the value of the contract.

This magnification of the effect of the capital, called leverage, can lead to significant gains

(or losses). These gains (or losses) can be much larger than the amount invested.

LEVERAGE

Investors can benefit from the out-performance of one stock

price over another through pair trading, by going long on one

stock and short on another stock through futures. There are also

opportunities for arbitrage when futures and underlying stock

prices diverge.

Futures fees can be lower than fees for trading

equities.

COST EFFECTIVE

Allows portfolio managers and investors to hedge their existing

market exposure, either increasing or decreasing

their exposure to volatility of the

underlying equity.

HEDGING

Futures contracts are always in a

standardised form.

STANDARDISATION

Benefits of Equity Futures

Nasdaq Dubai Single Stock Futures offer many benefits for investors.

Selling in advance (shorting) and buying back allows an investor to profit from a stock that is going down in price. Buying and then selling later allows an investor to profit from a stock that is going up.

PROFIT WHEN PRICE FALLS AS

WELL AS RISES

TRADING AND ARBITRAGE

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Unlike over the counter (OTC) transactions, on-exchange futures trading is regulated and offers better price transparency on standardised contracts. Nasdaq Dubai’s equity futures will be cleared through its central counterparty (CCP) clearing infrastructure. Nasdaq Dubai will act as a buyer to every seller and seller to every buyer. This helps Clearing participants to limit credit risk and achieve operational and financial efficiency.

Transparent pricing

Standard and neutral risk management standards

Daily mark to market and initial margining to mitigate market risk exposure

Regulated infrastructure

KEY BENEFITS OF A CENTRALLY CLEARED ENVIRONMENT:

Central Counterparty Clearing

An investor opens an account for futures trading with an approved Nasdaq Dubai broker. They can then place orders in the same way as for stock trades.

The initial payment for the futures is the initial margin. Profit and losses will be settled on a daily basis (known as variation margin). Investors must keep sufficient cash balance with their broker to meet their initial margin and daily variation margin requirement. If an investor fails to meet their margin requirement within the time specified by the broker, the broker may close the investor’s positions.

How To Trade

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Why UAE Equity Futures?

Nasdaq Dubai is the only exchange where futures on UAE equities can be traded.

UAE share markets are highly liquid, creating dynamic trading patterns (DFM volatility is 49%)

2014 upgrade of UAE to MSCI Emerging Markets Index has increased inward fund flows by an

estimated USD 1.2 billion

UAE GDP is 2nd largest in MENA, with IMF expecting 2.6% growth in 2016

The shares underlying Nasdaq Dubai futures account for 55% of traded value of all UAE listed

companies in 2016

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USD

Billio

ns Total Traded Value

(UAE Equity markets)

Feb-2015 Apr-2015 Jun-2015 Aug-2015 Oct-2015 Dec-2015 Feb-2016 Apr-2016

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1,000

2,000

3,000

4,000

5,000

6,000

Jan-2011 Sep-2011 May-2012 Jan-2013 Sep-2013 May-2014 Jan-2015 Sep-2015 May-2016

ADX General Index

DFM General Index

UAE Market Indices

FAQ

Can an investor buy or sell a futures contract before expiry?As long as there is a buyer or seller, futures can be exited at any time. There is no requirement to keep the futures till expiry.

What currencies are Nasdaq Dubai Single Stock Futures traded in?The currency will be of the underlying share. In practice, this means AED for all of them except DP World which is USD.

What are the trading hours?10:00 am – 2:00 pm, Sunday - Thursday.

Can non-UAE nationals trade?Yes. All nationalities are welcome.

Is short selling allowed?Yes. Selling in advance (shorting) and buying back allows an investor to profit from a stock that is going down in price.

Do I get cash dividends by holding futures contracts?Investors should note that long position holders in futures contracts will not be entitled to any ordinarycash dividend paid on underlying shares. The price of the futures contract will discount any expected upcoming dividend. Investors will have to consider the possibility of dividend uncertainty while trading.

What is the role of a market maker?A market maker provides liquidity to the market. Market makers are financial institutions thatsimultaneously offer both Bid and Ask prices for the same contracts.

What happens on the expiry date of the future?On expiry date the futures will be calculated based on the stock closing price (weighted average of last 30 minutes of trading). Any profit or loss will be calculated based on this price and settled accordingly. All open futures will expire on this date and variation margins will be called or paid and initial margins will be returned. Investors can ‘roll forward’ to the next contract period if they wish to keep the position open.

What are the risks involved in trading futures?Trading in futures carries risks for investors. It is recommended that investors seek advice before trading if they have limited experience.

Leverage – Magnification of the effect of the capital can lead to significant losses, considerably more than the movement of the underlying asset.

Close out – Futures contracts may be closed out on or before expiry date. Any open contracts are automatically closed on expiration day.

Margin calls – Your broker may make exposure-based margin calls during the term of the future, which require immediate cash settlement. Any failure to meet this margin call may result in liquidation of your positions with or without your consent.

Dividend uncertainity – Holders of futures contracts do not receive any ordinary dividends paid by the company on underlying shares. Investors must also consider that expected dividends declared and factored into futures prices are not certain and this may affect the profit or loss made by investors on their futures trading.

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Nasdaq Dubai is the international financial exchange in the Middle East. It combines international best practice with easy access by investors in the region and around the world.

The exchange’s tradable securities include equities, Sukuk and conventional bonds, funds, and REITs.

Combined market capitalisation of 80 listings

Total capital raised with aggregate demand exceeding USD 140 billion, since 2006

Best Exchange of the Year Middle East award 2014 from the Global Investor

Leading global exchange for Sukuk by value

Global exchange brand in the heart of the Middle East

Largest IPO in the region at the time with DP World 4.96

USD

B I L L I O N

97.0USD

B I L L I O N

70.0USD

B I L L I O N

About Nasdaq Dubai

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Disclaimer

Nasdaq Dubai Limited (Nasdaq Dubai) is regulated by the DFSA. The information provided in this document (“Information”) is provided by way of general information and comment only. While reasonable care has been taken in producing this Information, changes in circumstances may occur at any time and may impact on the accuracy of the Information. The Information does not constitute professional advice or provision of any kind of services and should not be relied upon as such. Nasdaq Dubai Limited and/or its affiliates, officers or employees (together “Nasdaq Dubai”) do not give any warranty or representation as to the accuracy, reliability, timeliness or completeness of the Information now or in the future. Nasdaq Dubai shall not be liable for any loss suffered, directly or indirectly by any person acting in reliance upon the Information contained herein.

No part of the Information provided is to be construed as a solicitation to make any financial investment. Information, including forecast financial information and examples should not be considered as a recommendation in relation to holding, purchasing or selling securities or other instruments. The information does not take into account any investor’s individual investment objectives, financial position and particular investment needs. As such, before making any decision, investors should conduct their own due diligence and consult their financial advisors. The performance of trading securities or instruments is not guaranteed and past performance is not an indication of future performance. Unless otherwise stated, Nasdaq Dubai Limited owns copyright in the Information contained herein. The Information may not otherwise be reproduced and must not be distributed or transmitted to any other person or used in any way without the express approval of Nasdaq Dubai.

©2016 Nasdaq Dubai Limited

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Nasdaq Dubai Limited, Dubai International Financial Centre, The Exchange Building 5, Level 7PO Box 53536, Dubai, United Arab Emirates

Nasdaq Dubai Equity Futuresfutures@nasdaqdubai.com+971 4 305 5471

Nasdaq Dubai General Enquiriesbusiness@nasdaqdubai.com+971 4 305 5455

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