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Diversification driving ADX growth and future strategy

Strategic partnerships will internationalise Abu Dhabi’s stock market

The launch of exchange traded funds (ETFs), international co-operation and more diversified investment products will create a stable, sustainable and more liquid stock market in Abu Dhabi, said Abu Dhabi Securities Exchange (ADX) Chief Executive, Tom Healy. Speaking today at the Paris Europlace International Financial Forum, Healy explained that ADX had been working closely with the Securities and Commodities Authority (SCA) and a number of international organisations, to develop the listing of ETFs on ADX as well as the development of more diversified financial products, including derivatives. “By introducing collective investment schemes and new investment tools, ADX will broaden its appeal away from a predominantly UAE retail-based market to one with a broader balance between domestic investors and international institutions”, said Healy. “In particular”, he continued, “we have been developing the legal and technical infrastructure required to introduce listed ETFs on ADX. ETFs are a cost-effective way for investors to diversify their portfolios and spread their risk, but they are currently under-developed in the Gulf region. We want to change this.” Since joining ADX last year, Healy and the ADX management have held extensive talks with other exchanges internationally, often resulting in Memorandums of Understanding to share knowledge and expertise that will further benefit the development of Abu Dhabi’s capital market. ADX serves the domestic cash equity market and has 65 listed companies with a market capitalisation of US$136 billion. In 2007, the average daily trading volume increased by more than 400%, with a substantial increase in foreign net investments.

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