FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
ABU DHABI SECURITIES MARKET
Abu Dhabi Securities Market showed
remarkable growth during the first half
of 2005.
Nizar Al Obaidly
Acting Director General
Abu Dhabi Securities Market (ADSM)
showed remarkable growth during the first
half of 2005.
The number of listed companies during this
period increased from 35 companies to 43.
The trading value rose up to US$ 13.6 billion
(AED 49.8 billion) compared to US$ 1.4
billion (AED 5.2 billion) in the previous year.
The number of trades increased to 202
thousand compared to 209 thousand during
the same period of the previous year.
Likewise, the daily average trading rose to
US$ 91 million (AED 334.4 million) from
HISTORY AND DEVELOPMENT
Trading securities in the United Arab
Emirates dates back to the early 1960s
when public shareholding companies
started to exist. It was a generic and
haphazard era with a securities market
created and operated by the mediation of
brokerage firms.
Trading in such an unstructured environment
had created flaws and imbalances in the
market, especially with the absence of a
proper mechanism to conclusively
determine the value of securities, the
absence of supervision and control of
brokerage firms as well as the lack of
transparency and disclosure by the traded
companies.
This tremulous situation had an adverse
impact in establishing fair policy for
evaluating securities, and resulted in severe
fluctuations in the market. In view of this
chaos values of most of the shares were
overstated leading to consequences and
heavy losses to the investors.
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US$ 9.6 million (AED 35.5 million) in
the second half of 2004. The market
capitalization as of the 30th June 2005,
reached US$ 112 billion (AED 411 billion)
whereas the figure as at December 31, 2004
was US$ 55.5 billion (AED 204 billion).
The market index on June 2005 closed at
5706.6 while in December 2004 the market
index closed at 3070.When adding the
distributed dividends during the first half of
2005, the increase of the market index was
approximately 90%.
Taking the above facts into consideration,
the issue of regulating the securities market
became significantly important with view to
its crucial role in the domestic economy.
Plans have been set up to organize the
market in order to ensure integrity and
smoothness of trading and the movements
of prices based on the power of supply and
demand and the information disclosed by
the listed companies. Within this framework,
intensive efforts resulted in the promulgation
of Law No. (4) of 2000 concerning the
establishment of the UAE Securities &
Commodities Authority and the
establishment of securities market.
FUTURE OUTLOOK
In 2006, ADSM plans to:
• continue the activities that support growth
in listing, turnover and liquidity.
• encourage the listing of family owned
companies and foreign companies
• increase system capacity to cope with the
growing market volume
• enhance IT processes and information
distribution
• enhance market standards:
• corporate governance
• capital adequacy and surveillance of
brokers
• educate brokers to improve their
knowledge
• further enhance registry and CSD services
• initiate bonds market
• continue alliance plans and link trading
with other stock exchanges
• improve laws, regulations and rules:
• commercial and capital market law
• securities regulation
• ADSM rules concerning listing, brokers
and trading