Dubai’s latest initiatives to deepen the emirate’s stock market operations seem to be paying off with India’s fund manager and entrepreneur Nikhil Kamath deciding to enter the emirate’s stock trading business.
According to market insiders in India, several other Indian firms are also expected to follow suit as Dubai seeks to strengthen its position as a global markets hub, unveiling mega financial packages and plans for listing state-owned firms.
“We are definitely considering it [to enter the stock trading business in Dubai],” Nikhil Kamath told Arabian Business.
He, however, added that the details of the entry plans are still being worked out.
Dubai earlier this month announced major reshuffling of its stock exchange’s board, while the Dubai Financial Market (DFM) has announced an incentive program that will encourage new initial public offerings (IPOs) and listings from private sector companies in a bid to strengthen its position as a global capital markets hub. The IPO push helped to more than double the value of the exchange operator, with the value recently hitting $5.4bn.
Kamath’s unicorn retail trading start-up Zerodha – which he co-founded with his brother Nithin – is among the leading stock trading firms in India.
Besides Zerodha, the Kamath brothers have also set up a hedge fund – True Beacon – which has sizable investor participation from the Middle East region.
Kamath said the initial idea is to become a trading member in the Dubai Financial Market.
“This will go hand in hand with the asset management we are doing in that region with True Beacon,” he said.
Kamath also revealed that True Beacon was open to exploring setting up global funds in Dubai.
Arabian Business last week reported True Beacon’s move to launch new global funds, aiming to woo more investors from the Middle East and other regions.
Cash-rich investors from the Middle East – expat Indians and local investors from the region – form a major part of Kamath’s two existing funds – True Beacon Global and True Beacon II – accounting for about 30 percent of their total corpus.
The entry level investments in True Beacon’s hedge funds are kept at $1 million.
Besides retail equity trading, Zerodha allows trades of currencies, commodities, mutual funds and bonds. It is said to be the largest brokerage firm in India by active client base.
With Kamath – a school dropout-turned entrepreneur and fund manager – taking the lead to enter the Dubai stock market sector, industry insiders said more leading broking firms and financial services companies from India are expected to expand their business operations to UAE.
“Some of the Mumbai-based ones are likely to follow suit soon,” a Mumbai-based industry official said.
Dubai recently announced plans for an AED2bn market maker and an AED1bn IPOs support fund to encourage tech companies to list on Dubai markets, as part of its initiatives to deepen and enlarge trading volumes on the bourse, and also to attract more trading participants.
“Attracting new IPOs will provide DFM’s global network of investors from over 208 nationalities with new investment opportunities,” Hamed Ali, CEO of DFM and Nasdaq Dubai, had said, while announcing the financial support programme.
Dubai earlier this month also unveiled plans to sell stakes in 10 state-owned companies, including utility major DEWA and its Salik road collection system.
Private and family-owned businesses are also being encouraged to sell shares on the local bourse.
Once the UAE’s leading exchange by traded volume, Dubai’s bourse is now pushed far behind by Abu Dhabi and Riyadh which drew in orders worth billions of dollars from marquee listings over the past year.
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