Dubai Financial Market (DFM) on Tuesday announced that it has reached the final stages of preparations to launch an equity derivatives platform in an effort to attract further investments.

The platform will be launched next month in cooperation with Dubai Clear and Nasdaq Dubai as well as leading brokerage firms, enabling investors to diversify and hedge their portfolios and access leverage.

It will introduce equity futures contracts on single stocks with tenure of 1-3 months. The inaugural contracts will include five of the most liquid equities listed on DFM including Emaar Properties, Dubai Islamic Bank, Emirates NBD, Emaar Development and Emaar Malls.

A futures contract is an agreement between two sides to buy or sell at a specific price on future date. Each DFM contract will be based on 100 underlying shares.

Essa Kazim, chairman of DFM, said: “The platform will play an essential role in broadening and deepening the market, adding new impetus to Dubai’s leading position a dynamic capital markets hub.”

Hassan Al Serkal, CEO of DFM, added: “DFM’s diverse investor base represents 207 nationalities and the derivatives platform will enable them to diversify their portfolios, manage risk and gain from the leverage."

Hamed Ali, CEO of Nasdaq Dubai and deputy CEO of DFM said: “Nasdaq Dubai’s derivatives market has achieved success and continuous development over the past years since its launch in September 2016... This growth is a testament to the strong demand from investors in the UAE and beyond for futures and we are confident that this asset class is poised to gain further momentum with the launch of the new DFM platform offering market participants new investment tools and opportunities.”

DFM said it will organise series of webinars and awareness sessions for brokers and investors to explain the details of contracts, trading rules and clearing arrangements for the new equity derivatives platform.