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Sun 18 Jan 2009 01:06 PM

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ADX outlook 'positive' despite global crisis

Long-term plans for transparency remain on-track for Abu Dhabi Securities Exchange.

The Abu Dhabi Securities Exchange (ADX) experienced a turbulent year in 2008 as the credit crisis rattled financial markets across the globe, but the long-term outlook is positive, ADX’s chief executive said on Sunday.

Chief executive Tom Healy said ADX’s development strategy has not been derailed by the crisis, and its main objectives of diversification and improving transparency remain in place.

ADX’s performance in the first half of 2008 was extremely strong, with trading volumes up 93 percent compared to the previous year, ADX revealed.

However, the second half of the year saw the stock exchange suffer as the global credit crisis hit Gulf markets hard, resulting in overall volumes for 2008 falling by four percent compared to 2007.

In terms of value, “the total value of equities trading for the whole of 2008 showed an increase of 32 percent compared to 2007, with 232 billion dirhams worth of shares changing hands compared to 175 billion dirhams the year before,” said Healy.

Etisalat remained the largest company listed on ADX by market capitalisation, followed by National Bank of Abu Dhabi, QTel, First Gulf Bank and Arkan.

The real estate sector, however, accounted for most of the trading value, followed by banks and financial services, and then energy.

In terms of individual listed companies, Aldar remained the highest in terms of trading value, with Arkan in second place and Sorouh in third.

Last year saw an increase in investors from 860,000 in 2007 to 877,000 in 2008 and, with an increase in activity from institutional investors, data from ADX showed.

“Increasing institutional participation is an important objective for ADX as it will stabilise the market in the longer-term,” Healy said.

The proportion of shares owned by foreign investors declined in 2008, accounting for 9 percent compared to 13 percent in 2007.

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