The merger of Abu Dhabi and Dubai stock markets will create one of the strongest markets in the Gulf region, the Middle East and North Africa, a senior official said on Monday.
Mohammed Al Hashemi, president of the UAE Financial Markets Association, said in comments published by news agency WAM that integration will attract more investors and create big opportunities to promote the UAE capital market.
He said this "would have significant benefits for both shareholders and participants in the market and thus the national economy".
He told WAM in an interview that the merger will help the country to get ranked higher among regional and international securities markets, thus attracting a lot more potential investors, especially foreign ones and international portfolios.
Earlier this month, it was reported that Abu Dhabi and Dubai have hired banks to advise on a possible merger of their two main stock exchanges.
Any merger of the exchanges would be one of the biggest reforms in the country's financial industry in recent years.
Talks on a tie-up between the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) have occurred on and off since at least 2010, but they have been hindered by differences over valuations and Dubai's 2009-2010 corporate debt crisis.
Al Hashemi said that the proposed merger to create a single securities market enables investors to conduct business from one platform, dealing with a single supplier, which helps to build strong credibility in the financial markets.
He described the merger as an appropriate business decision as there is not a need for two securities markets working in the same activity in the country.
He said that shareholders of the Dubai and Abu Dhabi markets will receive significant benefits from the proposed merger, including greater investment in the merged entity, both financially and operationally, which will support the share price performance and increase the proportion of profit distribution.
Al Hashemi added that after the merger, market dealers in Abu Dhabi and Dubai will become partners, not competitors, and will "cut the road to possible destabilisation and fragmentation".
The UAE Financial Markets Association, which was founded in 2011, has 200 members and works to keep members informed of the changes in the financial industry and provide a forum for discussion in organised events on issues affecting the markets.
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