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Dubai stock market looks to expand offerings

Dubai stock market looks to expand offerings

The younger of Dubai's two stock markets said Wednesday it will begin offering futures, stay open six days a week instead of five, and let companies list shares in the local currency.
The Dubai International Financial Exchange, which is one-third owned by Nasdaq OMX Group Inc., is also working to make it easier for U.S. companies to create a secondary listing in Dubai.
The three-year old DIFX said the changes are intended to boost trading levels and attract more of the region's wealthy investors.
"This is critical stuff we're doing," the exchange's recently installed chief executive, Jeff Singer, said. "We are executing toward a plan of greater liquidity for the exchange."
The DIFX was set up in September 2005 and aims to act as a financial bridge between stock markets in Asia and Europe. However, it suffers from light trading levels and has managed to attract just 15 listed companies so far. Only three are from the United Arab Emirates.
The exchange competes for business with two other locally oriented Emirates exchanges _ one in Dubai, the other in Abu Dhabi _ as well as a number of other markets elsewhere in the region.
There is wide speculation the DIFX will eventually merge with its older sibling, the Dubai Financial Market, potentially setting off a chain of consolidation among other Gulf exchanges. Government-controlled Borse Dubai is the majority owner of both trading floors and has smaller stakes in Borsa Italiana, the London Stock Exchange and Nasdaq OMX.
Singer, a former Nasdaq executive who joined the DIFX in July, hinted that a combination is possible, though he did not suggest it was imminent.
"If you look at the name of the game in exchanges, it's scale. We're high fixed-cost businesses," he said. "High fixed-cost businesses typically do ... make their way together."
The DIFX will give companies the option of listing shares in dirhams rather than U.S. dollars immediately. Other changes will be phased in over the coming months.
Peter FitzGerald, managing director for market operations at the DIFX, said the exchange will begin offering futures tied to the FTSE DIFX UAE 20 index, which mostly includes DFM shares, and its component stocks in November.
The exchange also plans to start trading on Sundays, in line with other UAE markets, and open at 10 a.m., an hour and 45 minutes earlier than now.
A "fast-track" process being developed with Nasdaq to help U.S. companies create a secondary listing in Dubai will make it easier for Gulf investors to buy stocks outside the region, the company said.


Updated : 2021-10-16 07:57 GMT+08:00