The international derivatives exchange Eurex announced today that it will offer futures contracts based on dividends of leading Swiss companies starting on 30 November 2010. The new contracts are based on dividends from ABB, Compagnie Financière Richemont, Roche Holding, Credit Suisse Group, Nestle, Novartis, Schweizerische Rückversicherungs-Gesellschaft, Swisscom, UBS and Zurich Financial Services. All underlying firms are part of the Swiss blue-chip index SMI.
"The listing of our new Swiss single stock dividend futures reflects the growing demand by investors for exchange-traded and centrally cleared products. Based on the success of our listed dividend futures, our customers have expressed further interest in Swiss-based contracts. Our new offering enables investors to participate in the performance linked to the dividend element of major Swiss companies", said Michael Peters, member of the Eurex Executive Board.
The specifications for the new contracts will be similar to the existing dividend products. In order to offer continuous quoting and thus support trading, a designated market making scheme will be offered from day one for the Swiss single stock dividend futures. Eurex will list annual contracts in Swiss franc in each name from December 2010 out to December 2014.
Introduced in June 2008, Eurex's dividend derivatives product suite trades more than 18,000 contracts daily. Almost 3.8 million contracts have been traded in 2010 so far. Open interest stands at 1.3 million contracts currently, representing more than 8.2 billion euro of notional dividend value.