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Mon 25 Jul 2016 10:33 AM

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Abu Dhabi Global Market eyes dedicated stock exchange

Agreement with Abu Dhabi Securities Exchange is first step towards establishing stock market at free zone

Abu Dhabi Global Market eyes dedicated stock exchange

Abu Dhabi’s financial free zone has signed a cooperation agreement with Abu Dhabi stock market – the first step in establishing a stock exchange at the free zone.

Abu Dhabi Global Market (ADGM) said on Sunday it had signed a memorandum of agreement (MoU) with Abu Dhabi Securities Exchange (ADX), under which the two bodies would “foster bilateral cooperation” to grow the emirate’s financial sector.

In a statement, ADGM chairman Ahmed Al Sayegh said the agreement enables the organisations to work together to set up a new financial exchange, and related financial products and services for investors.

He said: “The MoU is a strategic and symbolic extension of our close relationship with Abu Dhabi Securities Exchange. ADX has been an important contributing partner since the inception of ADGM and continues to be a significant stakeholder in the development of Abu Dhabi as an international economic hub.

“This collaboration allows both teams to work closely in establishing the objective of an exchange in ADGM.

“In addition, we will explore and develop a wider range of financial products and service offerings that can be available to, and traded by, both local and global market participants and investors in ADGM.”

Al Sayegh provided no further details of what the exchange would look like.

In an interview with Arabian Business in April, Richard Teng, CEO of ADGM’s governance body, the Financial Services Regulatory Authority, said a new ADGM exchange could be similar to London Stock Exchange’s off-shoot AIM, which caters to smaller, growing companies.

He indicated that this could be a way of differentiating between the new stock market at ADGM and other exchanges across the Gulf.

Said Teng: “We are working to establish [an exchange] in the free zone and talking with banks, market regulators, everyone, really. We want to do it well so we are not rushing.

“If you look across the region, I think we can be very different from the offerings here already. But exchanges serve a different purpose from [regulators and platform providers] so when you go into that exchange space the language can be quite different. There is no point rushing if you do not know the landscape well.”

Meanwhile, Hamad Abdullah Al Shamsi, chairman of ADX, said of the latest MoU: “ADX is committed to achieving the vision of the Abu Dhabi government by strengthening the capital market, developing a system for asset and wealth management, channelling financial surpluses in the financial sector towards investing in the core sectors, and activating non-traditional financing methods.

“Economic diversification alongside focusing on non-oil sectors is one of the main long-term goals of Abu Dhabi Economic Vision 2030.”

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expat08 3 years ago

Ultimately success will come from low listing costs vs. the other exchanges.