PhillipCapital DIFC Research Team

Components of Structured Products

Components of Structured Products A Detailed Guide for UAE Investors In the diverse landscape of modern investing, structured products have emerged as a powerful tool for portfolio diversification. They bridge the gap between traditional savings and the dynamic world of the stock market. But what exactly goes inside these “pre-packaged” investments? At Phillip Capital DIFC, we believe that transparency is the foundation of wealth management. To help you make informed decisions, we are breaking down the anatomy of a structured product to understand exactly how they function, how they generate returns, and how they manage risk. What is a Structured Product? A structured product is a hybrid investment instrument. Think of it as a pre-packaged investment strategy that combines two distinct financial elements into a single contract. It typically merges a fixed-income security (like a bond) with a derivative (like an option). This combination allows the product to offer a customized risk-return profile that traditional assets cannot achieve on their own. For example, a structured product can be designed to provide capital protection while still offering the potential to profit if the stock market rises. They are “structured” to meet specific investor goals—whether that is capital preservation, yield enhancement, or access to hard-to-reach asset classes. What are the Main Components of a Structured Product? To truly understand a structured product, you must look under the hood. While they can vary in complexity, almost every structured product consists of three primary components: The Bond Component (Capital Protection): This is the safety engine of the product. The Derivative Component (Return Generator): This is the growth engine. The Underlying Asset: This is the reference market (e.g., Gold, S&P 500, or Apple stock) that determines the performance. These components are wrapped together into a single “Note” or “Certificate” issued by a financial institution. How Does the Bond Component Work? The bond component—often a Zero-Coupon Bond—is responsible for the “capital protection” feature found in many structured notes. Unlike a regular bond that pays you interest (coupons) every year, a zero-coupon bond pays no interest. Instead, it is sold at a deep discount. For example, a bank might sell a bond for $80 today, promising to pay back $100 in five years. In a structured product, the issuer uses a large portion of your investment (say, 80% to 90%) to buy this bond. This ensures that, at maturity, the bond will grow back to the original principal amount (subject to the credit risk of the issuer). This mechanism allows the issuer to promise that you will get your initial capital back, regardless of what the stock market does. Capital Protection with Smart Market Exposure Protect your principal while staying invested. Get Expert Investment Advice What is the Role of the Derivative Component? If the bond safeguards your money, the derivative works to grow it. The remaining portion of your investment (the cash left over after buying the bond) is used to purchase a Derivative, usually a Call Option. An option is a financial contract that gives the holder the right to profit from the movement of an asset. If the market goes up: The value of the option increases significantly, providing the “bonus” return or yield on the structured product. If the market goes down: The option may expire worthless. However, because your principal was secured by the bond component, you simply get your original investment back (in a fully capital-protected product) rather than suffering a loss. This clever engineering allows investors to participate in market upside with defined downside risks. What is the “Underlying Asset”? The “Underlying Asset” (or Reference Asset) is the specific financial instrument that the derivative tracks. The performance of your structured product is directly linked to how this asset performs. Common underlying assets include: Equities: Single stocks (like Tesla or Microsoft) or a basket of stocks. Indices: Major market benchmarks like the S&P 500, NASDAQ 100, or Euro Stoxx 50. Commodities: Gold, Silver, or Oil. Currencies: FX pairs like EUR/USD. For example, if you buy a “Gold-Linked Note,” Gold is the underlying asset. If Gold prices rise, your return increases based on the participation rate defined in the note. What is the “Wrapper”? The “Wrapper” is simply the legal form the product takes. In the UAE and global markets, structured products are most commonly issued as EMTN (Euro Medium Term Notes) or Certificates. Think of the wrapper as the box that holds the Bond and the Option together. It defines the legal terms, the maturity date (when the product ends), and the issuer (the bank responsible for paying you). It is crucial to note that because these are legal debts of the issuer, they carry “Counterparty Risk”—meaning if the issuing bank goes bankrupt, the capital protection might fail. This is why choosing a reputable broker and issuer is vital. Why Should UAE Investors Consider Structured Products? Structured products offer a level of customization that buying shares or ETFs directly cannot match. They allow you to say: “I want exposure to US Tech Stocks, but I don’t want to lose more than 10% of my money if the market crashes.” By adjusting the components (Bond vs. Option ratio), Phillip Capital can help you find products that fit your exact risk appetite, whether you are looking for: Yield Enhancement: Generating higher coupons in sideways markets. Participation: capturing market growth. Protection: Prioritizing the safety of your principal. Ready to Diversify Your Portfolio? Access bespoke structured notes—designed for yield enhancement or capital protection—guided by regulated experts at Phillip Capital DIFC. Open an account Contact us Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with

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Dec 16 – Daily Market Updates

Leave a Comment / Market Updates, Daily Market Updates, Uncategorized / PhillipCapital DIFC Research Team

Dec 16 – Daily Market Updates Markets Daily: A Broad, Unbiased Look at Global Markets At a glance (as of 06:22 a.m. ET) S&P 500 futures: 6,864.25 (-0.24%) Stoxx Europe 600: 581.41 (-0.19%) Hang Seng: 25,235.41 (-1.54%) Bitcoin: 86,986.56 (+0.92%) WTI crude (front-month): 55.80 (-1.80%) Global mood Risk appetite eased to start the day as investors await a key US labor update. Equity futures in the US are a touch softer, Europe is modestly lower, and Asia ended mixed with notable weakness in Hong Kong. The dollar remains subdued near recent lows, oil extends its slide on signs of ample supply, and digital assets are firmer. What’s driving the session US labor print in focus: Markets are positioning cautiously into today’s employment report, which will shape expectations for the trajectory of interest rates into year-end and early 2026. A cooler jobs backdrop would reinforce the view that policy easing can proceed without reigniting inflation pressures; a hot reading would challenge that narrative and could steepen the front end of the curve. Europe mixed as growth and policy diverge: European equities are treading water with defensives and income-oriented shares outperforming cyclicals. Softer UK labor signals and moderating wage growth have strengthened the case for near-term policy easing by the Bank of England. Asia skews lower: Chinese and Hong Kong benchmarks remain under pressure amid lingering growth concerns and a pullback in tech-heavy segments. Regional performance was uneven, with select exporters and energy importers cushioned by lower oil. Oil drifts lower: Crude extends losses as supply indicators and risk-off positioning weigh. Refining margins and inventories remain in focus; energy equities may lag broader benchmarks if crude stays capped. Equities US: Futures point to a mild pullback after a strong multi-week run. Breadth and leadership remain in focus: recent sessions have seen participation broaden beyond mega-cap tech, a constructive sign for durability of the uptrend. Into the data, expect lighter volumes and intraday swing risk. Europe: Benchmarks are slightly negative with rate-sensitive sectors mixed. Lower yields have supported parts of the market, but earnings revisions and policy signals remain the key swing factors. Asia: Hong Kong led declines; mainland shares were weaker, while Japan and parts of ASEAN were more resilient. Lower energy prices helped transport and power-heavy pockets of the market. Fixed income and FX Rates: Front-end yields are anchored ahead of the data, with the curve sensitive to any shift in labor demand and wage dynamics. Markets continue to price a path toward easier policy over the next year, but the pace remains data dependent. FX: The dollar is hovering near multi-week lows as rate cut expectations firm and growth differentials narrow. Sterling is steady with BoE expectations skewing dovish on softer labor signals; the euro is range-bound. Commodities Energy: WTI trades below $60, adding to recent declines on evidence of comfortable supply and cautious demand assumptions. If the trend persists, it could ease headline inflation but weigh on energy capex and sector earnings momentum. Metals: Industrial metals are mixed amid cross-currents from China growth headlines and a softer dollar. Precious metals are little changed as investors balance lower yields against shifting risk sentiment. Digital assets Bitcoin is firmer, extending an upward bias as broader risk sentiment stabilizes and liquidity improves. Volatility remains elevated relative to traditional assets; position sizing and risk controls remain crucial for crypto exposure. Earnings and corporate themes Consensus earnings view: Street expectations continue to imply resilient profit growth over the coming quarters, with improving breadth beyond the largest technology names. The durability of margins, capital spending discipline, and a modest pickup in cyclical sectors are central to that outlook. Sector narratives: Autos and mobility are recalibrating electric-vehicle plans toward profitability and capital efficiency. Payments and fintech remain focused on licensing, compliance, and product expansion to drive engagement. IT services and consulting are emphasizing cost control and AI-enabled productivity to support margins. Structural watch: Europe’s long end European fixed income is preparing for portfolio shifts tied to pension and liability-hedging changes in parts of the region. Any rebalancing away from long-duration hedges could affect curve dynamics and relative-value relationships across maturities. Market depth is typically thinner into year-end, so execution and liquidity planning are key. Today’s key risks and watch list US employment report (08:30 a.m. ET): Jobs growth, unemployment rate, and wage trends will guide rate-path pricing and equity factor performance. Central bank signals: Messaging from major central banks this week will shape front-end rates, FX, and equity leadership. Liquidity/volatility: Year-end conditions can amplify moves; be mindful of wider bid-ask spreads and gap risk around data releases. Portfolio considerations Balance: Maintain diversified exposure across styles and regions; avoid concentration risk into binary macro events. Quality bias: In a slower growth, lower-yield setup, balance cyclicals with resilient cash flow and strong balance sheets. Duration and hedging: Consider whether current rate levels align with your duration targets; reassess hedges around key data. Market levels recap (06:22 a.m. ET) S&P 500 futures: 6,864.25 (-0.24%) Stoxx Europe 600: 581.41 (-0.19%) Hang Seng: 25,235.41 (-1.54%) Bitcoin: 86,986.56 (+0.92%) WTI crude (front-month): 55.80 (-1.80%) This publication is a general market update for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security, asset class, or strategy. Market data may be delayed. Consider your objectives, risk tolerance, and financial situation before making investment decisions. Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital

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Initial Public Offering Process guide

Leave a Comment / Deliverable Equities, Educational Blogs, Stock Market Basics, Uncategorized / PhillipCapital DIFC Research Team

IPO (Initial Public Offering) Process From Private to Public In the dynamic world of global finance, few events capture the market’s attention quite like an Initial Public Offering (IPO). Whether it is a tech giant in Silicon Valley or a major utility provider here in the UAE, an IPO marks a transformative moment where a private company opens its doors to public ownership. For investors, understanding the lifecycle of an IPO is crucial. It is not just about the “opening bell”; it is a rigorous, regulated journey involving due diligence, valuation, and regulatory approvals. As a leading broker regulated by the DFSA, PhillipCapital DIFC believes in empowering our clients with the knowledge to navigate these opportunities with confidence. Below, we break down the complex machinery of an IPO into a clear, descriptive guide. What exactly is an IPO and why is it significant? An Initial Public Offering (IPO) is the process by which a private corporation offers its shares to the public in a new stock issuance for the first time. Before an IPO, a company is considered “private,” meaning its shares are held by a small group of founders, early investors (like venture capitalists), and employees. The significance of an IPO lies in the transition. When a company “goes public,” its ownership is democratized. The company gets access to a massive pool of capital from the public market to fund expansion, pay off debts, or invest in research and development. For the market, it introduces a new investment vehicle, allowing retail and institutional investors to own a piece of the company’s future. Why do companies choose to go through the rigorous IPO process? Going public is time-consuming and expensive, yet it remains a primary goal for many growing businesses. The motivations are multifaceted: Capital Injection: It is the most efficient way to raise large amounts of money without incurring debt. This capital can be used for mergers, acquisitions, or expanding operations. Liquidity for Early Investors: Founders and early private investors often use an IPO as an “exit strategy” to monetize their investments. Public Profile and Credibility: Public companies often enjoy greater prestige and brand awareness. Being listed on a major exchange like the DFM (Dubai Financial Market) or NASDAQ implies that the company adheres to strict regulatory standards, which builds trust with partners and customers. Currency for Acquisitions: Publicly traded shares can be used as currency to acquire other companies, rather than using cash reserves. What are the key stages of the IPO Process? The road to an IPO is a marathon, not a sprint. While timelines vary, the standard process involves these critical phases: Phase 1: Selection of Underwriters: The company hires investment banks (underwriters) to manage the process. They act as the intermediaries between the company and the investing public. Phase 2: Due Diligence & Regulatory Filings: This is the “health check” phase. Auditors, lawyers, and bankers scrutinize the company’s financials. In the UAE, this involves approvals from bodies like the Securities and Commodities Authority (SCA) or the DFSA (for DIFC listings). The company must file a “Prospectus”—a detailed document outlining its financial health and risks. Phase 3: The Roadshow: The company’s management travels (physically or virtually) to pitch the IPO to top institutional investors. This helps underwriters gauge interest and determine the potential demand. Phase 4: Pricing and Allocation: Based on the demand during the roadshow, a final offer price is set. Shares are then allocated to institutional and retail investors before trading begins. Phase 5: Listing and Trading: The shares are officially listed on the stock exchange, and secondary trading begins. This is when the general public can buy and sell the shares freely. Looking to diversify your portfolio with global or regional equities? Open a secure trading account with PhillipCapital DIFC today. Open an account Contact us How does the IPO process in the UAE/DIFC differ from global markets? While the fundamental principles remain the same, the regulatory landscape in the UAE is specific. The Regulators: On the mainland, the Securities and Commodities Authority (SCA) oversees IPOs. Within the Dubai International Financial Centre (DIFC), the Dubai Financial Services Authority (DFSA) is the regulator. Retail Subscription: In the UAE, IPOs often have a dedicated “retail tranche” (a portion of shares reserved specifically for individual investors). To participate, investors typically need a NIN (National Investor Number) for local exchanges like DFM or ADX. Book Building: Similar to global markets, the UAE has moved towards a “book building” process where the price is discovered based on investor demand within a price range, rather than a fixed price set in advance. What is the “Quiet Period” and why does it exist? The “Quiet Period” is a mandated window of time during the IPO process where the company and its insiders are legally restricted from making any public statements that could hype up the stock or influence investors. This regulation ensures that all investors have access to the same information—specifically, the data found in the official Prospectus. It prevents the company from inflating the stock price through marketing spin rather than financial reality. For investors, this period is a reminder to rely on the official documents and fundamental analysis rather than news headlines. How can retail investors participate in an IPO? Participating in an IPO can be an exciting opportunity to buy into a company at its “ground floor” price. Here is how you generally proceed: Have a Brokerage Account: You must have an account with a regulated broker. For international IPOs or specific regional allocations, a broker like PhillipCapital DIFC provides the necessary platform and access. Check Eligibility: Read the prospectus to ensure the IPO is open to retail investors in your jurisdiction. Subscription: During the subscription period, you place an order for the number of shares you wish to buy. Note that if an IPO is “oversubscribed” (more demand than shares), you may receive fewer shares than you requested. Funding: Ensure your account is funded to cover the subscription cost. Don’t miss the next big market

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Dec 15 – Daily Market Updates

Leave a Comment / Market Updates, Daily Market Updates / PhillipCapital DIFC Research Team

Dec 15 – Daily Market Updates Markets Daily | Broad Market Update Overview Global risk appetite stabilized to start the week. US equity futures edged higher as the recent selloff in large-cap technology cooled, while European benchmarks advanced and Asia was mixed with Japan lagging. Core government bond yields eased a touch, the dollar was little changed on balance, and commodities firmed with precious and industrial metals supported. Crypto prices also traded higher. Market snapshot Equities: US futures up modestly, Europe broadly higher with cyclicals and miners leading, Japan softer following recent strength; small caps showing signs of catch-up versus mega caps. Rates: Treasury yields drifted lower along the curve, with the long end outperforming; markets continue to debate the pace and extent of policy easing next year. FX: Dollar broadly range-bound against G10; selective strength in high-beta currencies alongside improved risk tone. Commodities: Gold hovered near cycle highs as real yields eased; copper recovered part of last week’s drop; oil steady within recent ranges. Digital assets: Major tokens advanced, with bellwether names extending month-to-date gains. Key themes we’re watching Rotation beyond mega-cap tech: After a multi-quarter run in AI-heavy leaders, investors are reassessing valuations and diversifying into under-owned areas. Flows continue to rotate toward economically sensitive sectors, select industrials, energy, and parts of health care, as well as small and mid caps. Market breadth improvement is a constructive sign for bulls. Soft-landing versus slowdown: Incoming data continue to point to moderating inflation and a cooler—but still resilient—labor market. Whether hiring decelerates gently or more abruptly will be pivotal for the rates path and equity leadership into the new year. Policy outlook: Markets are pricing additional policy easing across major developed economies in 2026, with the path dependent on labor trends and inflation stickiness. Communications from central bank officials remain focused on data dependence and financial conditions. China’s domestic demand: Recent figures suggest investment and household spending remain subdued, keeping external demand an important growth driver. This dynamic bears watching for global trade relations and commodity demand This week’s highlights (global) United States: A busy slate with labor data and inflation prints in focus. Markets will parse employment and consumer price figures for confirmation of disinflation alongside a gradual cooling in hiring. Retail activity and regional manufacturing surveys will add color on year-end momentum. Europe and UK: Flash PMI updates and inflation readings will set the tone ahead of holiday liquidity; policy signals remain cautious as growth stays uneven. Asia: Multiple rate decisions across the region, plus Japan inflation and activity gauges. China’s monthly data pulse is in focus for signs of stabilization. Latin America and Canada: Select policy meetings and retail/price data; Canada’s inflation and consumer trends will help shape early-2026 rate expectations. Sector and asset-class color Technology: Earnings revision dispersion is widening. While secular AI demand remains a tailwind for infrastructure names, investors are scrutinizing spending paybacks and potential cannibalization across software categories. Industrials/materials: Benefiting from rotation and firmer metals; watch guidance tied to capex cycles and order backlogs. Energy: Crude is range-bound as supply discipline offsets concerns about global growth. Integrateds and select services names continue to trade with implied volatility tied to OPEC+ headlines and inventories. Financials: Credit metrics remain solid overall; funding costs and the shape of the yield curve remain key swing factors for net interest margins. Precious metals: Support from lower real yields and macro hedging demand; dips continue to find buyers. Credit: Spreads are tight by historical standards; primary issuance windows may narrow into year-end, but liquidity remains orderly. What could move markets next Labor-market inflection: Any downside surprise in job growth or uptick in unemployment would likely extend the rally in duration and favor defensives over cyclicals near term; a firmer print could revive the “higher-for-longer” debate. Inflation progress: Core measures continue to trend lower, but services components are sticky. A faster decline would unlock greater policy flexibility. Policy messaging: Speeches from central bank officials will be parsed for guidance on the runway and cadence of future rate moves. Year-end dynamics: Rebalancing, tax-loss harvesting, and thinner liquidity can amplify short-term moves. Watch market breadth, leadership, and options positioning as catalysts. Risk radar Growth disappointments in China or Europe that spill over into global manufacturing and commodities. Earnings downgrades if margin resilience fades as pricing power normalizes. Geopolitical flare-ups affecting energy supplies or trade routes. Liquidity pockets into year-end that exacerbate intraday volatility. The near-term tone is cautiously constructive: a steadier rates backdrop, improving market breadth, and resilient earnings expectations support risk assets. The path from here hinges on labor and inflation data. A gradual cooling remains the “goldilocks” outcome for both equities and duration, while any sharp turn in employment would argue for more defensive positioning and longer-duration exposure. Note: This publication is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Markets are volatile and subject to change without notice. Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. Rolling Spot Contracts and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of our retail client accounts lose money while trading with us. You should consider whether you understand

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Forex Market Structure and Hours

Leave a Comment / Spot FX and CFDs, Educational Blogs, Forex Basics / PhillipCapital DIFC Research Team

Forex Market Structure and Hours The Complete Guide for UAE Traders The foreign exchange market is unique. Unlike the Dubai Financial Market (DFM) or the New York Stock Exchange (NYSE), it has no central physical location. It is a decentralized, global network that never truly sleeps during the working week. For traders in the UAE, understanding this structure and aligning your schedule with global liquidity centers is the first step toward disciplined trading. In this guide, we break down the invisible architecture of the forex market and map out exactly when you should be watching the charts from your desk in Dubai. How is the Forex Market Structured compared to the Stock Market? The structure of the forex market is often described as “decentralized” or “Over-the-Counter” (OTC). In a traditional stock market, there is a centralized exchange (like the Nasdaq) that acts as the middleman for all transactions, ensuring a standardized price. In Forex, the “exchange” is a tiered network of participants connected electronically. The Top Tier (Interbank Market): This consists of the world’s largest banks (like Citi, Deutsche Bank, Barclays) trading directly with each other. They determine the raw exchange rates. The Middle Tier: This includes hedge funds, commercial companies dealing in import/export, and retail market makers. The Retail Tier: This is where individual traders operate. You trade through a broker—like PhillipCapital DIFC—who provides you access to the interbank liquidity. Because there is no central exchange, the market relies on this network to function 24 hours a day. Prices may vary slightly from broker to broker, which is why choosing a broker with deep liquidity providers is crucial for getting tight spreads. Looking for institutional-grade access to this market structure? Explore our Forex Trading Accounts and access global liquidity. Explore Forex & CFD Trading What are the Key Forex Trading Sessions in UAE Time? Since the market follows the sun, it cycles through four major financial hubs. For a trader based in Dubai (Gulf Standard Time), the schedule is incredibly convenient because the UAE is geographically positioned between the East and West. Here is the breakdown of the major sessions in UAE time (approximate, subject to Daylight Savings changes): Sydney Session: Opens approx. 1:00 AM – Closes 10:00 AM (UAE Time). This is the start of the trading day. Volatility is generally lower here, with a focus on AUD and NZD pairs. Tokyo Session: Opens approx. 3:00 AM – Closes 12:00 PM (UAE Time). The Asian session picks up momentum. JPY pairs see the most action here. London Session: Opens approx. 11:00 AM – Closes 8:00 PM (UAE Time). This is the heavyweight session. London is the financial capital of the forex world, handling roughly 43% of all global transactions. Trends often begin here. New York Session: Opens approx. 4:00 PM – Closes 1:00 AM (UAE Time). The US dollar is involved in 90% of all trades, making this a highly volatile and liquid session. Why is the market open 24/5, and does it ever close? The market stays open 24 hours a day during the week because as one financial hub closes, another opens. However, it does close for the weekend. Market Open: Monday morning in New Zealand (which is roughly roughly roughly Sunday late night/Monday early morning in Dubai). Market Close: Friday afternoon in New York (which is roughly Saturday very early morning in Dubai). It is important to note that while you can trade at 3:00 AM on a Tuesday in Dubai, liquidity might be thinner compared to the afternoon. Thin liquidity can sometimes lead to “slippage” or wider spreads, which is why understanding market structure is vital for risk management. How do Public Holidays affect the Market Structure? Since the market is decentralized, a public holiday in the UAE does not stop the global forex market. However, if it is a bank holiday in London (UK) or New York (USA), liquidity will drop drastically, and the market may become “rangy” (moving sideways). Conversely, if it is a holiday in Japan but not in Europe, the JPY pairs might be quiet, but the EUR and GBP pairs will trade normally. A smart trader checks the economic calendar daily to see which centers are offline. Does PhillipCapital DIFC offer access to all these sessions? Yes. As a broker regulated by the DFSA (Dubai Financial Services Authority), PhillipCapital DIFC provides you with the infrastructure to trade major, minor, and exotic currency pairs 24 hours a day, 5 days a week. Whether you are an early riser trading the Tokyo breakout or an evening trader focusing on the US heavy hitters, our servers are connected to the global grid. We combine this global access with local security. Your funds are segregated, and you are trading with a broker that has a physical presence right here in the Dubai International Financial Centre. Ready to Trade Forex with Confidence? Apply your knowledge of market structure and trading hours—open your live account and start trading today. Open an account Contact us Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. Rolling Spot Contracts and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of our retail client accounts lose money while trading

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Weekly Global Market News – Dec 15

Leave a Comment / Market Updates, Weekly Global Market Update / PhillipCapital DIFC Research Team

Weekly Global Market News – Dec 15 Week Ahead: Rates, inflation and jobs take center stage Overview A packed macro week will see three major central banks set policy, fresh inflation prints across multiple regions and a run of employment data. Markets will be parsing signals on how far the global easing cycle has to run in Europe and the UK, and whether Japan edges further away from ultra‑loose policy. Corporate news flow is busy too, with bellwether results in tech, logistics, consumer and travel. Top themes to watch 1) Central banks: BoE, ECB, BoJ Bank of England (Thu): A 25bp trim to 3.75% is widely expected after October GDP contracted 0.1%. The statement, vote split and guidance will be the market movers. Key questions: is this the last cut for a while, and how concerned is the MPC about sticky services inflation? Watch GBP front‑end gilts and the belly of the curve; a dovish vote split and soft CPI could bull‑steepen gilts. A more hawkish tone (limited room for further cuts) would support GBP. European Central Bank (Thu): Broadly expected to hold. Officials have recently framed inflation risks as more balanced. November HICP (Wed) is seen a touch higher at around 2.2% y/y, which should reinforce a steady hand. Market focus: staff assessment of growth/inflation balance, any hints on the pace of balance‑sheet runoff in 2026, and whether the door stays open to cuts next year. Watch EUR rates and periphery spreads. Bank of Japan (Fri): Decision is finely balanced, with odds tilted slightly toward another step away from negative/near‑zero rates following recent commentary from Governor Ueda. A move would have global spillovers: a firmer JPY, upward pressure on global yields, and potential headwinds for carry trades. If the BoJ stands pat, expect relief in carry and a softer yen near term. Also watch Friday’s Japan CPI. 2) Inflation and employment data UK (Wed): CPI/PPI for November. Services inflation and core momentum matter most for MPC reaction. Friday brings UK retail sales, public finances and the latest banking sector regulatory capital snapshot. Eurozone (Wed): Final HICP for November alongside Monday’s October industrial production. Any upside surprise in core would complicate the ECB’s hold‑for‑now stance. US (Tue/Thu/Fri): November employment report arrives Tuesday (re‑scheduled), followed by Thursday’s real earnings and CPI (revised release), plus Friday’s University of Michigan sentiment. Given recent shutdown delays, revisions could carry extra weight for the Fed’s growth/inflation mix. Canada (Mon): November CPI – important for the BoC’s early‑2026 path. Japan (Mon/Fri): Tankan survey (Mon) will color growth and capex expectations; CPI (Fri) anchors BoJ decision risk. Australia (Thu): Labor force data could tweak RBA expectations at the margin. Mexico and Norway (Thu): Policy decisions that feed into EM FX and Nordic rates. 3) Politics and policy risks to headline tape Berlin talks on Ukraine (week): Germany’s Chancellor Friedrich Merz hosts UK PM Sir Keir Starmer, France’s President Emmanuel Macron and potentially a US delegation to explore peace options. Any signals on funding and security guarantees could briefly swing EU risk sentiment. UK domestic calendar: The Prime Minister faces a Liaison Committee grilling Monday on delivery against the government’s “plan for change.” The British Medical Association will report Monday on doctors’ industrial action; a five‑day strike in England from Wednesday is possible. Health Secretary Wes Streeting appears before MPs on Wednesday. EU Council (Thu–Fri): Leaders meet in Brussels; watch for budget, defense and enlargement headlines. Trade and global forums: WTO General Council (Tue); Mercosur Summit (Sat), with the EU–Mercosur deal back in view. Earnings and corporate highlights Tuesday: Hollywood Bowl (FY), IG Group (trading update), SThree (FY trading update) Wednesday: General Mills (Q2), IntegraFin (FY), Lennar (Q4), Micron Technology (Q1), Serco (pre‑close) Thursday: Accenture (Q1), CarMax (Q3), Cintas (Q2), Currys (HY), Darden Restaurants (Q2), FedEx (Q2), Nike (Q2). Also noteworthy: court sanction expected for Alphawave IP’s acquisition by Qualcomm. Friday: Carnival (Q4), ConAgra Brands (Q2), Lamb Weston (Q2), PayChex (Q2), WHSmith (FY) – investors will look for clarity after the company flagged more time was needed to finalize accounts. Trading playbook by asset class • Rates UK: A 25bp cut is largely priced. Dovish risks: softer CPI and a wide pro‑cut majority could flatten the front end. Hawkish risk: “pause after this cut” language re‑steepens. Eurozone: Hold + balanced inflation messaging keeps Bunds range‑bound; periphery sensitive to any balance‑sheet hints. Japan: A hike/less‑accommodative tilt lifts JGB yields and can ripple into USTs/Bunds. No change likely bull‑flattens JGBs. • FX GBP: Direction tied to MPC tone and CPI. Dovish cut could push EUR/GBP higher; hawkish hold‑open may support cable. EUR: Steady ECB and marginally firmer HICP favor consolidation; EUR sensitive to periphery spreads and global risk tone. JPY: Asymmetric risk around BoJ – policy tightening or guidance upgrade supports yen broadly; no change keeps JPY soft but vulnerable into year‑end rebalancing. USD: Jobs/CPI revisions and Fed‑speak cadence drive DXY. Soft data plus firm risk appetite tends to weigh on USD; risk‑off or stronger labor data supports it. • Equities Europe/UK: Rate stability plus cooling inflation is constructive for duration‑sensitive sectors (quality growth, staples), while banks track curve moves. UK domestics react to retail sales and consumer sentiment; BoE guidance key for housebuilders. US: Micron, FedEx and Nike offer signals on semis cycle, global trade/parcel volumes, and consumer demand mix into 2026. Japan: Stronger JPY on BoJ tightening is a headwind to exporters but can boost domestic defensives. • Credit Steady ECB and a well‑telegraphed BoE cut are supportive for spreads; watch periphery and HY for sensitivity to growth downgrades. Corporate results (FedEx/Nike) will guide consumer and logistics credit tone. • Commodities Macro‑driven week: global PMIs and policy outcomes likely dominate energy/metals via growth expectations; watch USD path for gold. The week at a glance (selected) MONDAY OECD: G20 GDP growth report Canada: November CPI EU: October industrial production Japan: December Tankan business survey UK: Rightmove House Price Index TUESDAY Global: S&P Global flash PMIs (Eurozone, France, Germany, India, Japan, UK, US) UK: December labor market report; UK

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Dec 12 – Daily Market Updates

Leave a Comment / Market Updates, Daily Market Updates / PhillipCapital DIFC Research Team

Dec 12 – Daily Market Updates Markets Daily — Broad Market Update As of 06:04 a.m. ET Market snapshot S&P 500 futures: 6,897.75 (-0.14%) Stoxx Europe 600: 583.38 (+0.35%) US 10-year Treasury: 4.164% (+1 bp) Hang Seng: 25,976.79 (+1.75%) Bitcoin: 92,465.63 (-0.45%) Overview Global equities remain near cycle highs, with Europe advancing and US futures easing modestly after a strong run. Asia finished mixed but was led higher by Hong Kong. Government bond yields are broadly steady, with the US 10-year hovering near 4.16% as markets weigh a gradual path toward lower policy rates. Risk appetite is being supported by resilient profit trends, improving market breadth, and an outlook for easier financial conditions into next year. Equities US: After setting fresh records, futures point to a softer open as investors digest gains. Participation has broadened beyond a handful of leaders, with cyclical and defensive pockets both contributing. Positioning remains constructive but less euphoric than earlier momentum-driven phases, which can help sustain rallies into lighter year-end liquidity. Europe: Broad indices are firmer, helped by industrials and financials. Easing energy costs and fading inflation pressures continue to underpin sentiment, though growth signals remain mixed across the region. Asia: Hong Kong outperformed, while other major markets were mixed. Policy support measures and signs of stabilization in parts of the Chinese economy continue to be monitored by investors. Fixed income US Treasuries are little changed, with curve dynamics sensitive to incoming data and central bank communication. The balance between easing inflation and steady growth is keeping real yields in focus. Credit spreads remain tight, reflecting robust demand for quality income and contained default expectations. Primary issuance is seasonally lighter into year-end. Currencies The US dollar is broadly range-bound, with the medium-term trajectory tied to relative rate differentials. If the Federal Reserve continues to guide toward gradual easing while other central banks hold steady or turn less accommodative, the dollar could face a softer backdrop. Major pairs may remain headline-driven into upcoming data and central bank appearances. Carry dynamics and volatility levels remain key for tactical positioning. Commodities Precious metals extend recent gains, supported by lower real yields and portfolio hedging demand. Energy prices are steady, balancing supply risks with a still-moderate demand outlook. Inventory trends and producer guidance into year-end remain important signals. Industrial metals are supported by capex tied to electrification, data infrastructure, and grid investment, though short-term moves remain sensitive to China data and the global growth pulse. Digital assets Crypto prices are consolidating after a strong multi-month advance. Beyond price action, institutional infrastructure continues to evolve, with ongoing work on tokenization, settlement, and market plumbing. Regulatory enforcement remains active, emphasizing the importance of risk controls and counterparties. What’s driving markets now Policy path: Markets continue to price a measured easing cycle over the next year, conditional on inflation progress and growth durability. Earnings resilience: Profit margins and cash flows have held up better than feared, encouraging risk-taking beyond a narrow set of leaders. Market breadth: A wider set of sectors participating has historically been a constructive signal for trend sustainability. Year-end dynamics: Rebalancing flows, lower liquidity, and tax considerations can amplify moves in both directions into late December. What to watch next Inflation updates across major economies Retail sales and high-frequency growth indicators Central bank remarks and meeting minutes Credit conditions, issuance windows, and year-end liquidity Market breadth, volatility, and leadership rotation Risk radar Re-acceleration in inflation or wages that challenges the easing narrative Growth disappointments in the US, Europe, or China Geopolitical shocks impacting energy and supply chains Tight market liquidity into year-end amplifying price swings The backdrop remains constructive: moderating inflation, expectations for gradual policy easing, and improving breadth are supporting risk assets. After a strong run, near-term consolidation would be typical, but the medium-term narrative still favors disciplined exposure, selective quality, and attention to portfolio ballast. Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. Rolling Spot Contracts and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of our retail client accounts lose money while trading with us. You should consider whether you understand how Rolling Spot Contracts and CFDs work, and whether you can afford to take the high risk of losing your money. Dec 12 – Daily Market Updates PhillipCapital DIFC Research TeamDecember 12, 2025 Dec 12 – Daily Market Updates Markets Daily — Broad… Read More Dec 11 – Daily Market Updates PhillipCapital DIFC Research TeamDecember 11, 2025 Dec 11 – Daily Market Updates Markets Daily: Policy tailwinds… Read More Dec 10 – Daily Market Updates PhillipCapital DIFC Research TeamDecember 10, 2025 Dec 10 – Daily Market Updates Morning Market Brief Snapshot… Read More Dec 09 – Daily Market Updates PhillipCapital DIFC Research TeamDecember 9, 2025 Dec 09 – Daily Market Updates Market overview Global markets… Read More Dec-08 Daily Market Updates PhillipCapital DIFC Research TeamDecember 8, 2025 Dec 08 – Daily Market Updates Markets Daily — Broad… Read More Dec 05 – Daily Market Updates PhillipCapital DIFC Research TeamDecember 5, 2025 Dec-05 Daily Market Updates Markets Daily – Broad Market Update… Read More Nov 28 – Daily Market Updates PhillipCapital DIFC Research TeamNovember 28, 2025 Nov 28 – Daily Market Updates Markets Daily:

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Types of Derivatives: Futures, Options, Swaps, and Forwards

Leave a Comment / Exchange Traded Derivatives, Derivatives Basics, Educational Blogs / PhillipCapital DIFC Research Team

Types of Derivatives Futures, Options, Swaps, and Forwards In the dynamic financial landscape of the UAE, understanding the instruments at your disposal is the first step toward building a resilient portfolio. Derivatives are powerful financial contracts that derive their value from an underlying asset—be it stocks, commodities like Gold, currencies like the AED or USD, or interest rates. As a DFSA-regulated broker, PhillipCapital DIFC is committed to elevating your market knowledge. In this guide, we break down the four pillars of the derivatives market—Futures, Options, Swaps, and Forwards. What are Futures Contracts and how are they used in the UAE? A Future is a standardized contract to buy or sell a specific asset at a predetermined price on a set future date. Unlike “buying the asset now,” you are agreeing to a transaction that will happen later, but the price is locked in today. In the UAE context, Futures are incredibly popular for two main purposes: Speculation and Hedging. Speculation: Traders might buy a DGCX Gold Future if they believe gold prices will rise, allowing them to profit from the price movement without storing physical gold bars. Hedging: A construction company in Dubai might sell Copper Futures to lock in costs, protecting themselves if material prices spike before a project begins. At PhillipCapital DIFC, we provide access to global exchanges (like CME and ICE) and local powerhouses like the Dubai Gold & Commodities Exchange (DGCX), giving you access to liquid markets for currencies (like INR/USD), commodities, and indices. Ready to trade the future? Access global Futures markets including DGCX Gold and S&P 500 contracts with a regulated broker. Open an Account How do Options differ from Futures? While Futures obligate you to fulfill the contract, Options give you the right—but not the obligation—to buy or sell. This key difference makes Options a versatile tool for risk management. Call Option: Gives you the right to buy. You might buy a Call on a US Tech stock if you think it will skyrocket but want to limit your risk to just the “premium” you paid for the option. Put Option: Gives you the right to sell. This is often used as “portfolio insurance.” If you own a portfolio of GCC equities and fear a market downturn, buying Put options can offset potential losses in your stock holdings. Options allow for complex strategies that can profit from volatility itself, not just direction. What are Swaps and are they available to retail investors? Swaps are derivatives where two parties exchange cash flows or liabilities from two different financial instruments. The most common type is an Interest Rate Swap, where one party exchanges a floating interest rate for a fixed one to manage exposure to rate fluctuations. Generally, Swaps are Over-The-Counter (OTC) instruments utilized by institutions, banks, and corporations rather than individual retail traders. For example, a Dubai-based corporation might use a swap to convert a variable-rate loan into a fixed-rate one to predict future expenses accurately. Note: While standard swaps are institutional, retail traders at PhillipCapital often encounter “Swap Points” or “Rollover fees” in FX trading, which function on similar principles of interest rate differentials between two currencies What is a Forward Contract and how is it different from a Future? A Forward is very similar to a Future—it is an agreement to buy/sell at a future date. However, the key difference lies in standardization. Futures are traded on exchanges (like DGCX or CME), meaning they have standardized sizes, expiration dates, and are cleared to remove counterparty risk. Forwards are private, customizable agreements between two parties (OTC). You can customize the exact date and amount. Because they are private, Forwards carry counterparty risk (the risk the other guy doesn’t pay up). For most individual traders, Futures or CFDs (Contracts for Difference) are the preferred route as they offer the liquidity and safety of a regulated exchange environment. Looking for customizable exposure? Experience forward-like flexibility with easy-to-trade CFDs. Explore CFDs Which derivative is right for my strategy? Choosing the right instrument depends on your goal and capital: For pure volume & low cost: Futures are often preferred for their tight spreads and high liquidity, especially on indices and commodities. For strategic flexibility: Options are ideal if you want to define your maximum loss (the premium) upfront while keeping upside potential open. For short-term flexibility: CFDs (offered by PhillipCapital) allow for smaller contract sizes than Futures, making them suitable for traders who want to hedge specific amounts without buying full-sized contracts. Why trade derivatives with a regulated broker like PhillipCapital DIFC? Derivatives involve leverage, which amplifies both gains and risks. Trading with a DFSA-regulated entity ensures: Segregated Accounts: Your funds are kept separate from the company’s operational funds. Transparency: No hidden fees or “phantom” execution. Global Access: One account gives you access to 15+ global exchanges, bridging the gap between Dubai and Wall Street. Conclusion Mastering the mechanics of Futures, Options, Swaps, and Forwards transforms how you approach market volatility—turning potential risks into calculated opportunities. Whether you are a corporate treasurer looking to hedge exposure or a savvy trader seeking leverage on the DGCX, the right infrastructure makes all the difference. As a DFSA-regulated broker, PhillipCapital DIFC offers you the security, technology, and global reach needed to trade these complex instruments effectively. Don’t just watch the markets move; position yourself to profit from them with a partner you can trust. Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade

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Dec 11 – Daily Market Updates

Leave a Comment / Market Updates, Daily Market Updates / PhillipCapital DIFC Research Team

Dec 11 – Daily Market Updates Markets Daily: Policy tailwinds meet tech turbulence Market snapshot (as of 5:18 a.m. ET; levels subject to change) Nasdaq 100 futures: 25,596.25 (-0.78%) Stoxx Europe 600: 579.18 (+0.17%) CSI 300 (China): 4,552.19 (-0.86%) S. 10-year Treasury yield: 4.141% (-1 bp) Bitcoin: 90,318.67 (-2.25%) Overview A dovish-leaning policy tone from the Federal Reserve initially lifted risk assets, but that momentum faded as investors reassessed growth expectations for large-cap technology and AI-linked names. The result is a mixed session across regions: Europe is holding modest gains, Asia lagged with mainland China under pressure, and U.S. equity futures are softer as traders weigh valuation sensitivity against a supportive rate backdrop. Macro and policy Federal Reserve: The central bank cut its policy rate by 25 bps for a third consecutive meeting, signaling confidence that inflation is trending lower while noting emerging risks to the labor market. Market pricing implies additional easing further out, and the U.S. dollar eased as front-end rates fell the most. Notably, internal divisions at the Fed highlight a less uniform committee, underscoring the possibility of more data-dependent swings in the months ahead. Rates reaction: The curve bull-steepened with short-dated yields leading the move lower, reflecting greater sensitivity to the policy path. Benchmark 10-year yields slipped, supporting interest-rate–sensitive sectors. Trade and geopolitics: Fresh tariff measures from Mexico on selected Asian imports align more closely with evolving U.S. trade stances. The potential spillovers: supply-chain reconfiguration, modest nearshoring tailwinds, and renewed dispersion across industrial and consumer sectors with exposure to North American manufacturing. Equities U.S.: Gains following the Fed decision were clipped by a reversal in mega-cap tech sentiment. The immediate catalyst was renewed scrutiny of the AI capital-expenditure cycle after a prominent cloud/software vendor pointed to heavier data-center investment with a slower near-term revenue conversion. The broader takeaway: investors are increasingly selective within AI beneficiaries, rewarding clearer earnings visibility and cash-flow discipline over backlog headlines alone. Europe: Broad indices are firmer, with defensives, select healthcare, and utilities supported by softer yields, while cyclicals are mixed. Energy and materials lag where China exposure is heavier. Asia: Mainland Chinese shares slipped as growth concerns and property-related risks remained in focus. Elsewhere in the region, performance was mixed as investors balanced tech volatility with stabilizing rate expectations. Credit and rates Investment grade credit spreads remain contained, aided by the drop in Treasury yields and steady demand for high-quality income. High yield is stable but more sensitive to any further de-risking in growth equities. Many multi-asset managers continue to pivot toward short-duration high-quality bonds to lock in real yields while keeping optionality should the easing cycle extend. Currencies and digital assets FX: The dollar softened following the Fed move, with high-beta currencies finding temporary support. Follow-through will likely hinge on upcoming U.S. growth and inflation prints and how they influence the front-end. Crypto: Risk appetite in digital assets remains fragile; Bitcoin slid back below a key round level overnight. Volatility and correlation to broader risk sentiment remain elevated. Commodities Crude is range-bound as markets balance steady demand indicators with ongoing supply discipline. Softer bond yields are supportive at the margin, but a stronger macro impulse from Asia remains elusive. Industrial metals are mixed, with Chinese growth signals and trade policy developments steering near-term direction. What we’re watching U.S. data: Next readings on inflation, labor-market claims, and retail demand will shape how far and how fast markets price the path of policy easing. Earnings: A handful of high-profile reports are due after the close from a warehouse-club retailer, a diversified semiconductor platform company, and an athleisure brand—useful barometers for U.S. consumer health, enterprise IT spend, and inventory discipline. AI and cloud: The gap between record infrastructure outlays and realized revenue remains the key debate. Focus is on providers with clearer monetization timelines, power availability, and supply-chain execution. Positioning thoughts Quality bias: In an environment where rates are easing but growth leadership is narrowing, emphasize companies with strong balance sheets, resilient margins, and predictable free cash flow. Duration mix: Short-duration, high-quality fixed income can help harness attractive real yields while protecting against path risk if the policy trajectory shifts. Selective growth: Within AI-linked equities, prioritize firms with near-term revenue recognition, pricing power, and credible capacity expansions over backlog-only narratives. Diversification: Maintain a diversified stance across geographies and factors, given elevated cross-currents from policy, trade, and tech-cycle dynamics. The policy backdrop is turning incrementally friendlier for duration and quality assets, but the equity leadership remains concentrated and vulnerable to earnings reality checks. Expect choppy trading as markets navigate the balance between a gentler rate path and a more discriminating view of growth and valuation—especially in AI and cloud. Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. Rolling Spot Contracts and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of our retail client accounts lose money while trading with us. You should consider whether you understand how Rolling Spot Contracts and CFDs work, and whether you can afford to take the high risk of losing your money. Dec 11 – Daily Market Updates PhillipCapital DIFC Research TeamDecember 11, 2025 Dec 11 – Daily Market Updates Markets Daily: Policy tailwinds… Read More

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Bond Issuers Government vs Corporate Bonds

Leave a Comment / Fixed Income, Bond Basics, Educational Blogs, Uncategorized / PhillipCapital DIFC Research Team

Bond Issuers Government vs Corporate Bonds What UAE Investors Need to Know In the current economic landscape of late 2025, where interest rates are stabilizing and global markets offer new opportunities, fixed-income securities remain a cornerstone of a resilient portfolio. For investors in the UAE, the choice often boils down to two primary categories: Government Bonds and Corporate Bonds. While both serve the purpose of raising capital, their risk profiles, yield potentials, and roles in your portfolio differ significantly. At PhillipCapital DIFC, we believe that informed decisions are the most profitable ones. This guide breaks down the critical differences between these bond issuers and helps you decide which aligns best with your financial goals. What is the fundamental difference between Government and Corporate Bonds? The core difference lies in the issuer—the entity borrowing your money. Government Bonds (Sovereign Debt): These are issued by national governments. When you buy a US Treasury Bond or a UK Gilt, you are essentially lending money to that country’s government. These funds are typically used to finance public projects, infrastructure, or manage national debt. Because they are backed by the taxing power of a nation, major sovereign bonds are considered “risk-free” benchmarks. Corporate Bonds: These are issued by companies—ranging from global giants like Apple or Tesla to emerging market firms—to fund business expansions or M&A activities. Unlike stocks, where you own a piece of the company, bonds are simply a loan you provide to them. Expert Insight: For UAE investors, diversifying between high-grade US Treasuries (for safety) and Corporate Bonds (for yield) is a common strategy. How do the risk and return profiles compare? The “Risk-Reward Trade-off” is the golden rule of bond investing. Government Bonds: Generally offer lower yields because the risk of default is minimal. In times of economic uncertainty (like the volatility seen in early 2024), investors flock to government bonds as a “safe haven.” Corporate Bonds: To attract investors, companies must offer higher coupon rates (interest payments). Investment Grade: Issued by stable companies with good credit ratings (e.g., BBB and above). High-Yield (Junk) Bonds: Issued by companies with lower credit ratings. These offer significantly higher returns to compensate for the higher risk of default. Looking to trade with leverage? Explore our CFD options on Bond Indices to hedge your physical portfolio. Explore CFD Products What are the tax implications for UAE residents investing in global bonds? One of the most significant advantages for investors based in the UAE is the tax efficiency. Personal Income Tax: As of late 2025, UAE residents generally do not pay personal income tax on interest income or capital gains earned from investing in foreign bonds. This means the coupon payments you receive from a US Corporate Bond or a UK Gilt are typically yours to keep, tax-free, locally. Withholding Tax: It is important to note that the source country might withhold tax. However, the UAE has an extensive network of Double Taxation Avoidance Agreements (DTAA). Corporate Investors: For UAE corporations, the 9% Corporate Tax applies to net income exceeding AED 375,000. Bond interest is considered taxable income unless specific free zone exemptions apply. What are the tax implications for UAE residents investing in global bonds? Liquidity refers to how quickly you can convert your bond into cash without affecting its price. Government Bonds: The market for major sovereign debt (like US Treasuries) is the most liquid market in the world. You can buy or sell millions of dollars worth of these bonds in seconds with very tight spreads. Corporate Bonds: Liquidity varies. Bonds issued by massive blue-chip companies are highly liquid. However, bonds from smaller companies may trade less frequently. Why should I choose PhillipCapital DIFC for bond trading? Regulatory Trust: We are regulated by the DFSA (Dubai Financial Services Authority), ensuring your investments are handled with the highest standards of transparency and security. Global Access: We don’t just offer local regional bonds. Our platform connects you to global exchanges, allowing you to buy US Treasuries, European Sovereign debt, and Asian Corporate bonds all from one account in the DIFC. Institutional Pricing: Leveraging our global network (PhillipCapital Group has roots in Singapore since 1975), we provide retail investors with competitive pricing often reserved for institutional desks. Ready to build a balanced portfolio? Open your account today and access over 1,000+ global bond instruments. Open an account Contact us Which bond type is right for me in the current 2025/2026 market outlook? The “right” choice depends on your financial goals: Choose Government Bonds if: Your priority is capital preservation. If you are nearing retirement or need to park cash for a short period (1-3 years) with zero tolerance for loss, short-term US Treasuries or highly-rated sovereign debt are ideal. Choose Corporate Bonds if: You are in a growth phase and want to beat inflation. If you can tolerate some market fluctuation, Investment Grade corporate bonds currently offer attractive yields that outperform standard bank deposits. Stay updated with weekly insights for smarter bond timing Read Market Updates Disclaimer: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors as you could sustain losses in excess of deposits. The products are intended for retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. The content of the Website must not be construed as personal advice. For retail, professional and eligible counterparty clients. Before deciding to trade any products offered by PhillipCapital (DIFC) Private Limited you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. Rolling Spot Contracts and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of our retail client accounts lose money while trading

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