NASDAQ Dubai, the Middle East’s international financial exchange, is preparing to open a platform on which investors can trade Sukuk (Islamic bonds) and conventional bonds.
Trades will be automatically and exclusively routed for settlement at Euroclear Bank. The tradable securities will initially comprise at least 12 Sukuk and bonds that are listed on the exchange, with a nominal value of $10.9bn.
The bond trading platform will be available to institutional and high-net worth investors and will be opened and gradually developed in coming weeks.
Essa Kazim, Chairman of Borse Dubai, the holding company for Dubai’s stock exchanges, said: “The new platform is a natural extension of Dubai’s existing role as a centre for Sukuk and bond issuance and listing. NASDAQ Dubai will offer an efficient trading venue to participants from the region and around the world, providing fresh impetus to the growth of the capital markets in the UAE and the region.”
Tim Howell, Chief Executive Officer of Euroclear, commented: “Euroclear Bank’s proven post-trade infrastructure will complement NASDAQ Dubai’s new platform, helping issuers gain access to the largest and most diverse community of global trading counterparties. Our commitment to Dubai and the Middle East region will be strengthened further by this new relationship with NASDAQ Dubai.”
Hamed Ali, Acting Chief Executive of NASDAQ Dubai, said: “The opening of the platform will be an important step in Dubai’s growth as a global leader in innovation in the Sukuk and bond sectors. We look forward to creating further depth in the fixed income market and will collaborate with investors and other participants to steadily develop and enhance the platform.”
The platform will open with links to leading UAE and international financial services institutions, creating a first class trading and settlement infrastructure.
For the first time, prices of NASDAQ Dubai-listed Sukuk and bonds will be visible to all investors simultaneously on the same screen-based system, through the exchange. This will increase transparency and efficiency in the secondary market as well as promoting liquidity.
Currently the Sukuk and bonds are tradable through banks offering investors different trading structures and different prices (known as ‘over the counter’ trading).
The NASDAQ Dubai platform will expand investor choice and aims to bring new participants into the market. A number of NASDAQ Dubai Members have already signed up to the new platform in order to offer Sukuk and bond trading to their clients and other Members are preparing to do so.