ADX, FTSE Russell to create new benchmark indices

Dubai - The exchange launched single stock futures in the fourth quarter of 2021 following an agreement sealed in September with Nasdaq

The Abu Dhabi Securities Exchange’s (ADX) robust strategy to be recognised as a global exchange was manifested on Tuesday with the announcement of its partnership with FTSE Russell — a wholly-owned subsidiary of the London Stock Exchange Group — to develop co-branded indices, supporting the exchange’s recently launched derivatives market.

The world of finance often sees asset managers, financial institutions, ETF providers, and investment banks use FTSE indices to benchmark their performance, and create new products, which are used worldwide.

Arne Stall, chief executive officer of FTSE Russell, said: “ADX is an innovative and vibrant marketplace that empowers the UAE’s economy. We are delighted to work together to strengthen the country’s capital markets with open access to data, pricing, and performance metrics. Our collaboration confirms FTSE Russell’s commitment to the Middle East region and we look forward to announcing a range of new benchmarks in the coming months.”

The FTSE ADX General Index (FADGI) is replacing the ADX General Index, and FTSE ADX sector indices will take the place of the existing sector indices, leveraging the Industry Classification Benchmark.

ADX is the first exchange in the region to make FTSE Russell its index administrator. Further new indices will be co-developed under the partnership to support ADX’s vision of introducing tradable new index products on its market.

The exchange launched single stock futures in the fourth quarter of 2021 following an agreement sealed in September with Nasdaq to deliver matching, real time clearing and settlement technology as ADX broadens its asset class offerings.

The FTSE ADX General Index will include all eligible companies listed on the ADX and ten sector specific indices (consumer discretionary, utilities, consumer staples, energy, financial, healthcare, industrials, real estate, telecommunications and basic materials).

FTSE Russell classifies UAE as a ‘Secondary Emerging’ market within its Global Equity Index Series (GEIS). As part of the FTSE Russell and ADX agreement, a new series of sustainable finance indices and Shariah compliant indices are also planned.

FTSE Russell is committed to continued investment and innovation in the UAE and the wider region. Saeed Hamad Al Dhaheri, chief executive officer of Abu Dhabi Securities Exchange, said: “Our partnership with FTSE Russell is part of ADX’s wide-ranging strategy to develop a dynamic exchange, which includes investment in state-of-the art market technology and increasing the opportunity set for investors and issuers. The new range of FTSE-ADX indexes will provide robust benchmarks and support the listing of index derivatives, ETFs other index-based products on the exchange.”

ADX’s benchmark index, the ADI, crossed the 9,000-point threshold in 2021 for the first time. The benchmark gauge rose 68 per cent last year, making it one of the best performing exchanges in the world. At the same time, the exchange’s market capitalisation more than doubled to Dh1.6 trillion with net foreign investment reaching Dh15.2 billion.