Nasdaq Dubai is the premier international stock exchange in the United Arab Emirates (UAE) and the wider Middle East region. It is known for providing a series of shariah-compliant securities, indices and bonds. This guide will explain what the Nasdaq Dubai is and detail what you need to get started trading on the exchange, including a summary of its products, rules, regulations, trading hours and tips to maximize returns. We also list the top supporting brokers in 2022.
What Is The Nasdaq Dubai?
Nasdaq Dubai Limited (ticker symbol: NDAQ) is the international financial exchange between East Asia and Western Europe. Global investors have access to a variety of products such as Sukuk (Shariah-compliant ‘bonds’), conventional bonds, and equities from within the region.
The exchange was originally founded by the Nasdaq OMX Group and the Borse Dubai group in September 2005, but in May 2010, it became jointly owned by the Dubai Financial Market (DFM) and the Borse group, split 2:1.
Importantly, Dubai is the world’s largest centre for Sukuk listings, with Nasdaq Dubai making up 95% of the 51.21 billion USD while pledging to expand this. In total there are over 70 companies listed on the stock exchange, with the value of equities traded growing by 347% according to recent monthly trade reports (December 2020 – January 2021).
The region of the exchange comprises the Gulf Corporation Council (GCC) including the UAE, the Middle East and North Africa, Turkey and India.
Dubai Financial Market Vs Nasdaq Dubai
Both the DFM and Nasdaq Dubai are stock exchanges, the main difference between the two being that DFM are the majority shareholders of Nasdaq Dubai, and Nasdaq Dubai was set up after DFM to trade international stocks.
The two are regulated by different bodies; DFM by the Securities and Commodities Authorities (SCA), and Nasdaq Dubai by the Dubai Financial Services Authority (DFSA). The SCA is UAE-based and a government agency whereas the DFSA is an independent body that enforces international standards. There is virtually no difference in how to trade on DFM and NDAQ, only in what is available to trade.
The DFM location is in the World Trade Organisation (WTO) and Nasdaq Dubai is located in the Dubai International Financial Centre (DIFC).
- 26 September 2005: Nasdaq Dubai launched as the Dubai International Financial Exchange (DIFX) and listed equities and index products
- 2007: DIFX listed the largest IPO in the Middle East with DP World Limited DPW raising 4.96 billion USD
- 2008: NASDAQ OMX Group acquired a one-third share and DIFX became NASDAQ Dubai. Borse Dubai is still the majority shareholder. In the same year, the live exchange also became the first to offer equity derivatives in the UAE
- 2010: DFM acquired a two-thirds stake in Nasdaq Dubai simultaneous to Nasdaq Dubai switching to using the DFM trading platform to trade all its equities. The acquisition was planned and worth 121 million USD
- October 2011: The exchange’s Official List of Securities is transferred to the DFSA, shifting the burden of approving prospectuses and listings to the DFSA to improve efficiency
- 2012: SMEs including family-owned businesses can be listed on NASDAQ Dubai due to the DFSA reducing the market cap for companies from 50 million USD to 10 million USD
- July 2012: A change of management was announced as chairman of NASDAQ Dubai, Abdul Wahed El Fahim, announces Jeff Singer stepping down as CEO of the exchange, to be replaced by Hamed Ali, who previously worked as Executive Officer (2006-2008)
- 2013: Sukuk and conventional bonds (fixed income trading) can now be traded on the platform following the UAE’s Prime Minister’s initiative to transform Dubai into the world hub of Sukuk. By March 2013, NASDAQ Dubai took up over 60% of the 10.17 billion USD value of Sukuk’s listed on Dubai’s exchanges
- October 2013: Bank of London and Middle East (BLME) lists its shares on NASDAQ Dubai
- April 2014: NASDAQ Dubai and Emirates Islamic Bank partner and create a new facility called the NASDAQ Dubai Murabaha Platform which provides regional banks with Shariah-compliant financing solutions for their clients
- April 2014: The Emirates Real Estate Investment Trust (REIT) becomes the first REIT to be listed in an exchange in the GCC following a 175 million USD IPO
- November 2014: NASDAQ Dubai partners with the Egyptian stock exchange MCDR to enable dual listings
- September 2016: The exchange launches a single stock equity futures market, trading 4,385 futures contracts in the first two days
- March 2017: Shares of ENBD REIT (a Shariah-compliant REIT) are listed on NASDAQ Dubai following an IPO of 105 million USD
- February 2018: DFM General Index Futures is launched, which is NASDAQ Dubai’s first index product
- 2019: FTSE Russell and Nasdaq Dubai collaborate, allowing the exchange to launch derivatives on the FTSE Russell’s Saudi Arabia equity indices
- 2020: Launch of Nasdaq Dubai growth market, allowing SMEs who are experiencing rapid growth to access capital markets and to go public
- 2020: DP World announces plans to delist from Nasdaq Dubai in a move to return to private ownership as its parent company sets to acquire 19.55% of its shares traded on the exchange. At the time of the announcement, DP World’s share price was 12.3 EUR
- 2021: 3iQ’s ‘The Bitcoin Fund’ is listed on Nasdaq Dubai, becoming the first listed digital asset-based fund in MENA
Before delisting, DP World was one of Nasdaq Dubai’s biggest companies listed on the exchange. Other significant players include:
- Depa PLC
- SWVL PLC
- ENBD REIT
- Emirates REIT
- The Bitcoin Fund
- Orascom Construction PLC
- Investment Corporation of Dubai
Nasdaq Dubai has a total listed value of Sukuk’s of 49.06 billion USD, with the Islamic Development Bank (IsDB) making up the biggest proportion of this with 13 issuances making up 18.04 billion USD. This makes the exchange the world’s largest centre for Sukuk listings.
How Does The Nasdaq Dubai Work?
Nasdaq Dubai is known for its Sukuk listings – Shariah-compliant bonds. Listing requirements include a minimum market cap of 2 million USD, providing a Shariah certification and appointing Shariah supervisory boards.
The FTSE Nasdaq Dubai UAE 20 Index is available to trade on the exchange. It comprises the top 20 eligible constituents ranked by full market cap for the use of the GCC and international investors. Moreover, the FTSE also offers a Nasdaq Dubai Shariah Index series which is made up of 15 Islamic-friendly companies.
The Nasdaq Dubai Ideal Ratings Global Sukuk Index is also listed with a group of USD sub-indices for alternate trading opportunities. The subindices are:
- Nasdaq Dubai IdealRatings USD Investment Grade Sukuk Index (NISKIG)
- Nasdaq Dubai IdealRatings USD Sovereign Sukuk Index (NISKSV)
- Nasdaq Dubai IdealRatings USD Corporate Sukuk Index (NISKC)
- Nasdaq Dubai IdealRatings USD Financials Sukuk Index (NISKF)
- Nasdaq Dubai IdealRatings USD GCC Sukuk Index (NISKGC)
The futures available on Nasdaq Dubai are in sectors from real estate and petrochemicals to banking and transport. Companies include Aldar Properties, Emirates Telecommunications Group (Etisalat), Rabigh Refining And Petrochemical Co., and Saudi Arabian Mining Co. Trading is also available on the Murabaha platform.
A Bitcoin ETF is available to trade on the exchange and enables investors to transfer their units from the Toronto Stock Exchange to Nasdaq Dubai and vice versa, as well as acquire directly from the exchange.
Conventional bonds are also listed alongside Sukuk’s, notable ones including Capital Bank of Jordan, Commercial Bank of Dubai P.S.C, Emirates Development Bank P.J.S.C and Government of UAE Treasury bonds.
Private companies can issue their shares on the Central Securities Depository (CSD) allowing investors to buy and sell them through brokerages that are members of Nasdaq Dubai. Trading takes place off-exchange, with the transfer of ownership taking place in the CSD and companies having different listing requirements to maintain security.
Notable Private Market Companies include Malabar Gold and Diamonds, W Motors, and Manrre REIT.
How To Start Trading On The Nasdaq Dubai
Whether you want to invest in Nasdaq Dubai from the UAE or from overseas, this guide will help you get started:
- Choose a brokerage to open an investor account and get a NIN: Do your research before selecting one of the 39 members Nasdaq Dubai offers. Consider the fees they quote and choose features catered to you such as accessible data charts and graphs, as well as reliable customer service that is easy to contact. Also think about minimum deposit requirements, regulatory authorities, and the quality of the trading platform – does it have all the historical data you? Is it fast and reliable? Is there a mobile app for easy access?
- Develop a strategy: Trading is inherently risky, so it is important to have a strategy before you begin. There are many existing techniques and approaches available online to take inspiration from, but the main thing is to research previous market data and patterns to make sure you are well versed in the market you are trading so you can make informed investment decisions and maximize profits.
- Choose a stock: Nasdaq Dubai have plenty of listed securities so choosing what to trade will require consideration and planning. The volatility and trading volume of a stock are the two main attributes to analyze. Usually, the more volatile a stock the more profit can be made, but the risk is also higher. Additionally, some traders use the IPO of stocks as a guide – if it is high there is a possibility of decent profits. The level of importance you place on volume and volatility depends on the strategy you choose to trade with. It will be important to keep track of fluctuation in stock prices so live index trackers and screeners will be useful.
Rules & Regulations
NASDAQ Dubai is licensed by the Dubai Financial Services Authority. The regulatory body holds them to various rules regarding the clearing house, admission and disclosure standards and corporate governance requirements. These define rules which regulate:
- The process that companies must follow to have their securities admitted for trading
- Companies’ obligations after their securities have been admitted to trading
- The behaviour of members and the obligations to customers. This is also covered by the Business Rules
- The Clearing and Settlement procedures as covered by the exchange’s Business Rules
The working hours of Nasdaq Dubai are from the opening hours of 06:00 GMT to the closing hours of 11:00 GMT from Sunday to Thursday, as weekends in the UAE are Fridays and Saturdays. Trading times for specific securities are listed on the exchange’s website, in Dubai’s time zone.
There were some minor differences between Nasdaq Dubai’s trading and settlement calendar between 2020, 2021 and 2022, mainly due to Islamic holidays differing yearly, so it is important to keep up to date with any changes. The general rules of the stock exchange’s calendar are outlined below:
- On US Federal Reserve Holidays, no settlements take place for USD
- Trading Holidays are published at the beginning of every year but are subject to change
- There are usually no Settlements for USD on Sunday. Settlements are performed only from Monday to Thursday due to different weekends observed in the US and UAE
- There may be additional short notice holidays, which will be promptly notified to Market Participants
Additionally, on New Year’s Day, Eid Al Fitr, Arafat (Hajj) Day, Eid Al Adha, Hijri New Year’s Day, The Prophet’s birthday, Commemoration Day, and the two UAE National Days, the market is either closed or it is a non-trading day. The exact dates some of these falls on fluctuate yearly. Cross-reference these dates with non-trading dates specific to the region you are trading from to create a fully comprehensive trading calendar.
Pros Of Trading On The Nasdaq Dubai
The Nasdaq Dubai is leading in Islamic financial products, so it is a good place to trade the likes of Sukuk’s. If you are based within the region, then it is also one of the best ways to access stocks of international markets.
Nasdaq Dubai Academy
The Academy provides tailored courses to issuers, members, investors, market participants, and the public, to improve their financial literacy. It can help quash any doubts before beginning trading if you choose to participate.
Nasdaq Dubai’s Company Announcements and News Disclosure system is a Regulatory Announcement System (RAS), which is an automated processing system that supports issuers in meeting regulatory disclosure obligations, reaching investors across the MENA region and European and American markets. This is available for an annual fee between 1,500 USD – 2,500 USD.
Tips For Trading On The Nasdaq Dubai
- Do your research: The exchange itself offers a wide variety of resources to make trading easier and keep you in the loop: The Academy, free guides on their YouTube channel, access to annual and monthly reports, access to financial statements, updates on their Twitter and Instagram. Explore the companies of the stocks you are interested in such as yield previously earned, fluctuations in share price and data on revenue.
- Plan the trading day: Each day in trading is different as the market can be volatile. Before opening hours, check the previous day’s performance and plan what shares you will be tracking and trading.
- Demo accounts: Many brokers offer demo accounts for free. This will enable you to practise your trading strategy and get used to a platform without risking your finances. Once you feel confident enough you can open a real trading account.
- Watch & read relevant news: Nasdaq Dubai does offer the CANDI service, but it is important to actively stay up to date with what is happening in the market, as well as any external shocks and disclosures that can impact what you wish to trade. This will mean you aren’t blindsided by shock fluctuations and can reduce risks. Reliable sources: Yahoo Finance, Bloomberg and Google Finance
Final Word On Trading The Nasdaq Dubai
Nasdaq Dubai offers a wide variety of securities to trade, best known for those that are Shariah-compliant. They have multiple services to make trading as easy as possible and offer traders the opportunity to diversify their portfolios. Use our investing tips to get started and see our list of supporting brokers here.
Who Owns Nasdaq Dubai?
Nasdaq Dubai is jointly owned by the Borse Dubai group and the Dubai Financial Market (DFM). Until May 2010, it was partly owned by the Nasdaq OMX group.
What Is Nasdaq Dubai’s BIC?
The BIC number relates to the Swift code required to send money internationally. The Nasdaq Dubai BIC code is DIFXAEAAXXX.
Where Is Nasdaq Dubai’s Office?
There is no official address for Nasdaq Dubai. However, it is located in the Dubai International Financial Centre in the United Arab Emirates (UAE).
Is It Risky To Invest In Stocks On Nasdaq Dubai?
Trading is inherently risky whether on the Nasdaq Dubai or London Stock Exchange. This risk can be minimized with proper trading practice, risk management techniques and a carefully thought-through strategy.
Is Investing In The Nasdaq Dubai A Halal Investment?
Nasdaq Dubai pledged to become the hub for Islamic financial services from its launch. It offers a range of shariah-compliant securities, indices, and bonds. See our guide to Halal trading for more information.
How Many Companies Are Listed On The Nasdaq Dubai?
70+ companies make up the UAE and Middle East’s top stock exchange. Head to the official website for live trading prices and details of respective constituents.