Dubai Financial Market, the region's only listed bourse, on Tuesday announced the list of securities eligible for trading under its new regulated short-selling (RSS) service aimed at boosting liquidity and attracting foreign investors.
“The regulated short-selling enables investors to short securities listed on DFM through selling borrowed shares with a commitment to return to the lender based on the mutually signed agreement,” the DFM said in a statement on its website.
The DFM had announced plans in July to introduce short-selling – the practice of selling borrowed shares in the hope of buying them back later at a lower price – by the end of 2017.
Tuesday's statement listed the following 19 securities as eligible for short selling: Air Arabia, Ajman Bank, Amanat Holdings, Amlak Finance, Arabtec Holding, Damac Properties Dubai, Deyaar, Dubai Financial Market, Dubai Islamic Bank, Dubai Investment, Drake & Scull International, DXB Entertainments, Emaar Properties, Emaar Malls, Gulf Finance, Al Salam-Bahrain Bank, Shuaa Capital, Union Properties and Afkar S&P UAE UCITS ETF.
The statement also listed the criteria for the eligibility of securities, including that their market capitalisation does not exceed Dh1 billion and their turnover from the preceding 12 months does not exceed 50 per cent of their market cap.
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It comes after Abu Dhabi's index, the Abu Dhabi Securities Exchange, introduced short-selling last October. Regional exchanges are introducing various initiatives to boost liquidity, attract new entrants and expand offerings to investors.
In October, ADX and Nasdaq Dubai said they would launch a futures contract linked to the Abu Dhabi General Index, enabling investors to trade equity futures on Nasdaq’s derivatives platform.
It followed an almost identical agreement between Nasdaq Dubai and the DFM the previous week.
In a separate announcement yesterday, Nasdaq Dubai said it will launch single stock futures on Bahrain-listed investment company GFH Financial Group, to enable investors to take positions on movements in the share price of the Bahrain-based company.
Dubai investment bank Shuaa Capital will provide market-making services on GFH to facilitate liquidity, as it does on all the exchange’s single stock futures, a statement from Nasdaq said.
“The addition of GFH to our market is the first step in an expansion that will include futures on more companies based in the GCC and elsewhere outside the UAE as the platform develops,” said Hamed Ali, chief executive of Nasdaq Dubai.
“We will continue to diversify the opportunities for investors to hedge or take a position on future price expectations, including making gains whether the value of the underlying share is falling or rising.”
