Prepared by: Muhannad Dagher
Experts in the equity sector believe that the vision of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the State, may God protect him, lead the UAE markets to further development and growth, which heralds the extent of the qualitative shift that the markets will in the near future, increase the depth of markets and attract more of liquidity and foreign investment, doubling the market value.
This came after the steps taken by His Highness as Chairman of the Executive Council of the Emirate of Abu Dhabi, where the markets saw a surge in listings and subscriptions, especially in the Abu Dhabi Securities Exchange, with the achievement of its highest historical levels, and the high levels of trading therein significantly, at a time when new appointments were announced for the post of Chairman of the Board Market Management and CEO.
These decisions came within the framework of efforts to develop the performance of government institutions and bodies in the country, to achieve qualitative leaps in the flexibility of their structures and policies, to update their strategies and to improve their preparations for the coming years. .
The local stock markets are moving from the mantle of traditional trading to the strong trading category, supported by plans to double the market value of the Abu Dhabi and Dubai financial markets, which are expected to reach 6 trillion dirhams over the next three years (before 2025 ), according to experts and observers.
Abu Dhabi Subscription Fund
This turnaround in the financial markets comes after the introduction of Sheikh Khalid bin Mohammed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi, Head of the Abu Dhabi Executive Office, Member of the Board of Directors of the Supreme Council . for Financial and Economic Affairs, and under the auspices of the Supreme Financial and Economic Affairs Council, the Abu Dhabi IPO Fund, as part of efforts to strengthen the position of the Abu Dhabi Securities Exchange.
The initial value of the Abu Dhabi Subscription Fund is 5 billion dirhams, and it operates under the supervision of the Supreme Council for Financial and Economic Affairs, and is managed by the Department of Economic Development – Abu Dhabi.
The fund aims to invest in 5 to 10 private sector companies annually, with a focus on small and medium-sized companies, by targeting between 10% to 40% of the total shares available for subscription, thereby helps growth by providing the necessary liquidity. by public offering.
The Abu Dhabi Fund for Subscriptions will work closely with several local banks to take advantage of their expertise in the process of listing companies, and seek to encourage private sector investors to list the companies’ offer for listing on the Abu Dhabi Securities Exchange. improve.
The fund and private investors will retain the shares after the subscription for a specified period.
The Abu Dhabi Subscription Fund helps to improve the attractiveness of the investment environment in Abu Dhabi and to motivate more private sector companies, including small and medium-sized companies, to list on the Abu Dhabi Securities Exchange, by providing liquidity and investor confidence in the initial public offering system, thus encouraging the private sector to invest.It also works to encourage the transition from reliance on debt financing to the optimal use of other available financing instruments.
Earlier this year, ADQ Holding Company announced the appointment of Hisham Khaled Tawfiq Abdul Khaleq Malik as chairman of the board of the Abu Dhabi Securities Exchange, in addition to the position he held as agent for the Department of Finance. since October 2020. The CEO of “Abu Dhabi Securities Exchange” has also been appointed Abu Dhabi Securities »Saeed Al Dhaheri, Managing Director of ADX.
The Abu Dhabi Securities Exchange was established on 15 November 2000 in terms of Local Law No. (3) of 2000. On 17 March 2020, the Abu Dhabi Securities Exchange was converted from a public institution to a public joint stock company in accordance with Act (8) of 2020. The market is affiliated with “ADQ Holding”, which is one of the largest holding companies in the region, which owns a wide portfolio of large institutions operating in key sectors within the diversified economy in the Emirate of Abu Dhabi. .
In the presence of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the State, “may God protect him”, the Abu Dhabi Securities Exchange concluded a partnership agreement with the Istanbul Stock Exchange last November, with the aim of strategic cooperation between the two parties and the development of the financial services sector in both the UAE and Turkey.
Under this partnership, the Abu Dhabi Securities Exchange and the Istanbul Stock Exchange seek to improve ways of joint cooperation through financial coordination and information exchange in several key areas, including the financial industry sector, strengthening the system of rules and regulations, developing financial products and risk management, in addition to supporting Financial Markets Infrastructure.
Earlier this year, the Abu Dhabi Securities Exchange signed a joint memorandum of understanding with the Kuwait Stock Exchange and the Kuwait Clearing Company to standardize and define operational, administrative and technical procedures, and effective listing and integrated coordination regarding listing. to bring about. , trading and joint central deposit operations, with the aim of improving liquidity in both markets, and expanding investment opportunities between them.
Under the Memorandum of Understanding, the Parties agreed to take the necessary measures to encourage and facilitate cooperation between them in the areas of data exchange, standardization of legislative regulations and the improvement of the financial culture of investors in both countries.
Abu Dhabi Stock Exchange
The Abu Dhabi Securities Exchange also announced the official approval of the Securities and Commodities Authority in January this year to adopt the first regulatory framework for companies established for acquisition and merger purposes in the Arab Gulf region, which will pave the way for their shares to be listed on the Abu Dhabi Financial Market this year.
It should be noted that this regulatory framework, the first of its kind in the GCC region, was developed by the Abu Dhabi Securities Exchange and the Abu Dhabi Department of Economic Development, in collaboration with legal and investment specialists, in order to formulate regulations for companies established for acquisition and merger purposes, based on the U.S. regulatory framework for companies incorporated as a standard for the purposes of acquisitions and mergers, as well as relevant international regulatory frameworks.
This regulatory framework will help to provide an attractive investment environment for international investors and provide them with broader prospects of unique growth opportunities. This regulatory framework will also include the regulations and provisions for sponsors outside the UAE to enable them to apply do for approval to make their list. companies’ shares in the category of companies established for acquisition purposes and mergers with the Abu Dhabi Securities Exchange.
The regulations of companies established for acquisition and merger purposes in the UAE are characterized by attractive incentives and an innovative share structure, which ensures the smooth and efficient presentation of private companies to the initial public offering to sponsors.
The Abu Dhabi Securities Exchange also announced that it has signed an agreement with “Nasdaq” to take advantage of its technological solutions for the markets, including a trading engine with a matching system, clearing and instant settlement services.
Under the vision of His Highness Sheikh Mohamed bin Zayed Al Nahyan, may God protect him, the Abu Dhabi Securities Exchange aims to double its market value over the next three years as it works at an accelerated pace to expand asset classes and new solutions and products for both local and international investors.
The market launch is followed by futures contracts for single stocks and indices, which expands its range of financial derivatives. This includes the diversification of investment options and the provision of the necessary hedging instruments to investors to ensure effective and efficient risk management.
The new working hours in the UAE markets, which started since last December 26, are added to a number of recently announced incentives, starting with the decision to extend working hours in the Abu Dhabi Stock Exchange and Dubai Financial Market, and the decision to reduce trading fees, which are in the interest of The two markets with opportunities to attract higher trading in the next phase, and reflect confidence in the continuity of current trading volumes.
In the Abu Dhabi market, it supports the ambitious goal set by the Abu Dhabi Stock Exchange to double the market value of the stock exchange and reach 3 trillion dirhams.
Meanwhile, the Dubai market is following in the same footsteps after His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, announced plans to form 10 government and semi-government companies in Dubai list. Financial market, establish a market maker worth one billion dirhams, and establish Specialized courts.
Dubai Financial Market
Heavy Industry IPOs
Financial experts and analysts view these accelerated steps to upgrade local financial markets as paving the way for a new investment method that may be similar to global and US markets, in terms of attracting quality investments, which compares in the coming will make. years linked to global rather than regional markets.
Experts expected that the markets in the future will see IPOs for heavy industries and in new sectors, especially that the current investment method has given investors confidence, due to the quality of these companies and confidence in management and regulation of listing operations, with the presence of a market maker eager for the continuity of capital markets.