Dubai Financial Market (DFM) has confirmed HSBC’s execution of the first international securities lending and borrowing transaction on the exchange.
The milestone marks the latest step in the continued evolution and expansion of Dubai’s capital markets, according to the exchange.
HSBC facilitated the transaction as custodian, acting as the lending representative for a large asset owner and a borrowing representative.
The London-based bank also acted as lending agent and, separately, as prime broker, borrowing DFM-listed equities from the asset owner which global institutional investors could then use to access the exchange.
For the DFM, providing end-to-end over-the-counter SLB transactions is a milestone development, enabling investors to hedge portfolios more effectively or take new positions to derive additional opportunities on traded securities.
SLB is part of the critical infrastructure facilitating the regulated short selling of securities and it also allows asset owners and managers to enhance the yield of their long-term holdings by lending out their securities to borrowers for an annualised fee, the DFM adds, while retaining their rights of holding the securities.
Commenting on the milestone, CEO of DFM and Nasdaq Dubai Hamed Ali says: "This transaction underscores the effectiveness of our market infrastructure to support the implementation of market strategies by our stakeholders. We look forward to seeing international participants making greater use of our SLB facility in the future."
Adnan Hussain, global head of agency securities lending and liquidity services at HSBC, adds: “We are pleased to have collaborated with Dubai Clear and to have used our deep local and global market knowledge to achieve this first-of-its-kind international transaction on the DFM.
“Securities lending activities contribute to a vibrant and robust marketplace, facilitate the efficient functioning of capital markets, and are expected to attract more international investors to the UAE as a result.”
Nabeel Albloushi, managing director, head of markets and securities services UAE and regional corporate sales, MENAT, HSBC comments: “We are pleased to have been able to act as a lending and borrowing representative, lending agent as well as prime broker, ensuring the efficient delivery of this transaction.
“It is a further testament to HSBC’s commitment to the development of the capital markets in the UAE and to ensuring that, in line with our ambition to be the world’s leading international bank, we are connecting clients to the substantial opportunities that exist in this dynamic and vibrant region.”
