The Bahrain Financial Exchange (BFX), the first multi-asset exchange in the Middle East and North Africa (MENA) region, today announced a new licensing agreement with FTSE Group, the award-winning global index provider, to list, trade and market a number of derivatives products based on a range of FTSE’s regional and international indices.
The derivatives, which are part of the BFX’s first phase product launch in October this year will be listed and traded through the BFX’s internationally-accessible trading platform. They will be based on the following indices: FTSE Emerging, FTSE Europe, FTSE BRIC 50, and FTSE Coast Kuwait 40.
By using FTSE indices, the BFX offers regional investors the advantage of gaining exposure and diversifying their portfolios with products based on international indices from developed and emerging economies which are traded and settled in US dollars on the same integrated platform.
Commenting on the announcement, Arshad Khan, Managing Director & Chief Executive Officer of the BFX and BCDC, said, “This is a significant addition to the BFX product portfolio and further enhances the BFX’s position as the preferred choice for the financial services sector by providing liquid futures contracts based on these regional and international indices.”
FTSE indices provide ready access to investors in the region to profit from the growing markets of the Emerging Nations, Middle East and Europe. As well as allowing participants to take exposure in multiple geographies through a single currency, the indices not only enable investors to diversify their portfolios but to also include some of the best performing stocks in the underlying market. More importantly, as each index covers a wide range of underlying markets, investors have the opportunity to reduce volatile conditions often experienced in the underlying cash markets without compromising on returns.
The BFX agreement with FTSE creates an innovative value proposition in the region, which has generated a lot of interest during the BFX’s ongoing MENA-wide membership campaign since its inception in June. To date, the BFX has received interest from over 50 leading financial institutions and brokerage houses.
Jonathan Cooper Managing Director, Middle East & Africa, FTSE Group said of the launch “We are delighted to work with the BFX, one of the key financial institutions in the region. By extending the range of our innovative and transparent index solutions in the region, we can give investors new opportunities to access local and international markets.”
This new development will go a long way in widening and deepening the capital markets in the GCC. The BFX and FTSE have worked hard to provide investors in the region with access to some of the best performing stock markets globally. The product line-up has been selected as a result of a robust research process covering the value chain of investors in the region.
Retail participation is also expected to account for a considerable proportion of trade volume due to low margin payments and as the indices enable individuals who have limited funds to participate and trade in the Index market – be it locally or internationally.