Abu Dhabi bourse to list big private firms to lure investors

The Abu Dhabi stock exchange is looking to list some of the emirate's large private companies to help boost liquidity on the bourse and ensure its benchmark index better reflects the economy, its chief executive said on Tuesday.

Roadshows for the listings are planned later this year in the Gulf and in London to attract more investors into Abu Dhabi, Rashed al Baloushi, chief executive of Abu Dhabi Securities Market (.ADX), told reporters.

"These companies are exactly like public joint stock companies but are wearing the hat of private companies. So why can't they be listed and the index will be more realistic," Baloushi said.

The new firms will be listed as Tier-2 stock without the need for initial public offerings (IPO), Baloushi said but did not give further details. Discussions were underway with the market regulator and he expected an approval to be given.

Baloushi did not say which firms were targeted for the listings but companies such as Manazel Real Estate, The National Investor, and diversified conglomerate Al Qudra are as large as publicly listed firms, yet their shares trade only on the unofficial over-the-counter market, according to a recent ADX study.

Investors from the United Arab Emirates currently make up more than 60 percent of trading volume in Abu Dhabi. The market index, largely driven by financial and real estate companies, gained 9.5 percent in 2012 and had a market capitalization of 249.5 billion dirhams ($67.9 billion).

As part of the initiative, the UAE Central Bank will become the main settlement bank from the second half of this year, taking over from the National Bank of Abu Dhabi, Baloushi said.

ADX also plans to offer registrar services to companies, such as organising annual general meetings and cash distribution, adding a new revenue stream for itself, Baloushi added.