Saxo Bank, the online multi-asset trading and investment specialist, has revealed that the most traded equity CFDs in the MENA region are focused on the US stock market and US tech companies.
Two of the top three most traded CFD equity indexes by Saxo clients in the MENA region since 1 January 2015 are the Dow Jones Industrial Average and the S&P 500, with the third being the German DAX. This trend in MENA also reflects the global Saxo Bank client preference for the US stock market, which is currently the best performing equity market in the developed world.
An analysis of the stock market evolution in USD since January 2008 by Christopher Dembik Head of Macro Analysis at Saxo Bank, shows the US stock market has increased by approximately 78% whereas most of the European stock markets are down over the same period, such as -55% for Italy, and -34% for Spain.
Globally, the Germany 30 index is overall the most traded CFD equity index by Saxo Bank clients based on the Net Traded Volume since 1 January 2015. However, three of the top five most traded CFD equity indexes in the past year are from US stock markets, respectively US SPX500, US 30 Wall Street and US Tech 100 NAS.
Additionally, the top five most traded single stock CFDs globally since 1 January 2015 are leading US tech companies Oracle Corp, Apple Inc, Facebook Inc, Amazon.com Inc and Alphabet Inc – A share. The information on top traded CFDs is based on internal research by Saxo Bank and is indicative.
CFDs, or Contracts for Difference, are derivative trading instruments which allow investment in a vast range of securities and asset classes, such as shares, equity indices and commodities, but without having to purchase or own the underlying asset. They are favoured by investors who want to maximise the impact of their cash available, for those who want the flexibility to take and liquidate a position at short notice to take advantage of alternative opportunities and transfer resources elsewhere; and for those who are indifferent to owning the investment itself but simply want to profit from its performance.
The purchase of a CFD is an agreement to settle in cash the difference between an opening price and a closing price of a particular asset and the investor has taken a position on. The CFD then tracks that asset’s price. The investor takes the position based on whether they think the asset will go up or down in value, without owning the underlying asset. CFD investors can also benefit from a falling market by selling a CFD that they believe will fall in price and then aim to buy it back alter for less money and make a profit. But if the asset rises in value, the investor also risks losing money.
Christopher Dembik, says: “The excellent performance of the US equity market can be partly explained by the fact that the USD surplus from emerging countries are transferred to the US market in periods of economic uncertainty. Therefore, even if the economic crisis began in the USA, the negative impact on the US stock market is temporary. The US market perfectly plays its role as a safe haven.”
Meanwhile the interest in single stock CFDs for tech companies looks like a trend that shows no sign of diminishing. Investors are turning to tech companies because they have shown to provide consistently good returns.
“There is no doubt that we are facing a tech bubble – Fed Chairwoman Janet Yellen warned about it in the summer 2015- but I don’t think that the aforementioned tech stocks are concerned by this phenomenon,” said Mr Dembik.
“Those companies that make up the top 5 traded single stocks by Saxo clients are quite profitable, have solid cash flows and keep innovating so we can be confident regarding their future. Like for the banking sector, when it comes to investing in tech companies, the most important thing is to adopt a very selective approach and not to focus on “trendy investments” – investments in new small or medium size tech companies that make the headlines from one day to another because of their new promising technology that is not yet commercialized.”
Mario Camara, the Head of Saxo Bank (Dubai) Ltd added: “CFDs are a very popular asset class in the GCC, especially so in the UAE, Qatar and KSA where they surpass Spot FX, ETF’s and Stocks. Although the results in trading volumes in US Indices and Tech stocks are similar in the GCC to the rest of the MENA region, of late we see a remarkably strong appetite for OILUK, OILUS and Gold CFDs.”
Saxo Bank most traded CFD equity indexes in the MENA region by Net Traded Volume for the period from 1 January 2015 – 30 September 2016:
1. DJ.I.A
2. DAX
3. S&P 500
Saxo Bank most traded CFD equity indexes by Net Traded Volume for the period from 1 January 2015 – 30 September 2016:
1. Germany 30
2. US SPX500
3. US 30 Wall Street
4. US Tech. 100 NAS
5. UK 100
Saxo Bank most traded CFD single stocks by Net Traded Volume for the period from 1 January 2015 – 30 September 2016:
1. Oracle Corp.
2. Apple Inc.
3. Facebook Inc
4. Amazon.com Inc
5. Alphabet Inc – A Share
For more information, please visit: http://ae.saxobank.com/cfds
About Saxo Bank Group
Saxo Bank Group (Saxo) is a leading multi-asset trading and investment specialist, offering a complete set of trading and investment technologies, tools and strategies.
For almost 25 years, Saxo’s mission has been to enable individuals and institutions by facilitating their access to professional trading and investing through technology and expertise.
As a fully licensed and regulated bank, Saxo enables its private clients to trade multiple asset classes across global financial markets from one single margin account and across multiple devices. Additionally, Saxo provides institutional clients such as banks and brokers with multi-asset execution, prime brokerage services and trading technology.
Saxo’s award winning trading platforms are available in more than 20 languages and form the technology backbone of more than 100 financial institutions worldwide.
Founded in 1992 and headquartered in Copenhagen, Saxo employs more than 1500 people in financial centres around the world including London, Singapore, Paris, Zurich, Dubai and Tokyo.
About Saxo Bank (Dubai) Ltd
Saxo Bank (Dubai) Limited is a wholly owned subsidiary of Saxo Bank A/S. Saxo Bank (Dubai) Ltd is regulated by the Dubai Financial Services Authority (DFSA)
CFD trading can result in losses that can exceed your deposit. Trading CFD markets involves a substantial degree of risk, and should not be undertaken until the trader has carefully evaluated whether their financial situation is appropriate for such transactions. Past performance is not a guide to future performance. Saxo Bank does not make any representations as to the accuracy or completeness of the material and does not accept liability for any loss arising from the use hereof.
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© Press Release 2016
