Dubai Financial Market (DFM) announced that HSBC has successfully executed the first international Securities Lending and Borrowing (SLB) transaction on the exchange, the latest step in the continued evolution and expansion of Dubai’s capital markets. Providing end-to-end, over-the-counter, SLB transactions is a milestone development for DFM, enabling investors to more effectively hedge portfolios 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 which also allows asset owners and managers to enhance the yield of their long-term holdings by lending out their securities to borrowers for an annualized fee, while retaining their rights of holding the securities. HSBC facilitated the transaction as custodian, acting as the lending representative for a large asset owner and a borrowing representative as well.
HSBC was also lending agent and, separately, prime broker, borrowing DFM-listed equities from the asset owner which global institutional investors could then use to access the DFM.
Hamed Ali, CEO of DFM and Nasdaq Dubai said in a statement: “I would like to express my appreciation to the team at HSBC who worked tirelessly to successfully execute the first international SLB transaction on DFM through Dubai Clear’s infrastructure. 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, said in a statement: “We are pleased to have collaborated with Dubai Clear and to have leveraged 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 and head of Markets and Securities Services for UAE and Regional Corporate Sales in the MENAT (Middle East, North Africa, Turkey) region at HSBC, said in a statement: “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.”