Dubai Financial Market to boost trade volume
Officials from the Dubai Financial Market (DFM) are planning to introduce a series of measures aimed at boosting the trade volume on the bourse, reported Gulf News. Those measures include, among others, trading in securities, bonds and options.
The most important step being taken is DFM’s encouragement of institutional and pension funds to be “leveraged to energize stock market trading,” Essa Abdulfattah Kazim, director-general of DFM told the Institute of Chratered Accountants of India, Dubai Chapter, and the Indian Business Council at a conference on last Tuesday.
By releasing local institutional and pension funds onto the market along with securities, bonds and options, DFM is hoping to attract a broader segment of the investing population. Kazim said that presently DFM is one of the lowest in the region in regard to percentage of market capitalization. In 1999, market capitalization was only 5 percent, compared to figures of 18 percent elsewhere on the region, with levels of 90 to 300 percent not uncommon.
The low volume of trade is attributed to two factors, Kazim said, “On the one hand, quite a few of the older listed companies have up to 90 percent of their equity in the hands of just two or three individuals and, on the other, government ownership in some companies extends to 80 percent.” But he did say that “We,” the DFM managers and directors, “should not and will not – interfere with market trading.”
Already, rules and regulations have been created and established to allow 100 percent foreign-owned companies to list on the country’s stock markets. No longer is a 51-49 percent local-foreign ownership shareholding criteria needed to list companies. Furthermore, all listed companies are now required to produce quarterly reports beginning next year to increase transparency. –(Albawaba-MEBG)