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2011 - A year of achievement

Both DFM and NASDAQ Dubai took significant steps forward in 2011, preparing the ground for renewed expansion and capital markets leadership as the economic climate revives. Many initiatives were carried out jointly, reflecting the growing synergies between the two exchanges following the outsourcing of NASDAQ Dubai equity trading to DFM’s systems in July 2010.

  • DFM successfully introduced a new DvP settlement mechanism in 2011 that reduces settlement risk and better safeguards investors’ rights, in line with its commitment to move towards international best practice.
  • NASDAQ Dubai enhanced its listing framework by transferring its Listing Authority to its regulator, Dubai Financial Services Authority (DFSA), to streamline the listing process in line with international standards.
  • The two exchanges maintained close contact with potential issuers during the year, including jointly holding an IPO conference on how and why to go public, attended by senior executives of leading UAE companies. NASDAQ Dubai held a capital markets conference jointly with Jafza that was attended by prominent companies based in Jebel Ali Free Zone, with a focus on listing on the exchange. The conference was the first initiative held under a Memorandum of Understanding signed by EZW, the parent company of Jafza, and NASDAQ Dubai aimed at identifying Jafza companies that could be suitable for an IPO on the exchange
  • DFM expanded its eServices tools to enable investors to sign up for access to realtime market data for both exchanges. Other enhancements include greater flexibility to submit online requests to DFM and for investors to monitor their share transactions and portfolio online. More than 11686 subscribers have signed up for the new services.
  • DFM accredited Arab German International Broker as the first broker able to carry out margin trading on the exchange.
  • NASDAQ Dubai welcomed Bank of America Merrill Lynch as the exchange’s first derivatives General Clearing Member. National Bank of Abu Dhabi was approved as a derivatives Trading Member. MENA Corp Financial Services joined as an equities Individual Clearing Member and Standard Chartered became a Custodian.
  • The value of Sukuk investments held for safekeeping in NASDAQ Dubai’s custody rose 36% over 2011.
  • DFM signed a new market data dissemination agreement with Thomson Reuters.
  • DFM welcomed the resumption of trading of Tamweel shares, as one of the leading Islamic finance companies in the UAE.
  • Key hires by NASDAQ Dubai included the arrival of Craig Hewett as Head of Business Development and Angela Russo as General Counsel and Acting Head of Market Regulation.

Dubai Financial Market performance 2011

The market capitalization at DFM decreased in 2011 by 9.5% to reach AED 180.1 billion compared to AED 199 billion the previous year.

The value of shares traded during 2011 reached AED 32.1 billion, compared to AED 69.7 billion recorded during 2010, a decrease of 54%. The number of shares traded decreased by 34.5% to reach 25.2 billion shares during the year, compared to 38.4 billion shares traded during the previous year.  The number of transactions executed during 2011 decreased by 44% to reach 444,800, compared to 794,700 deals carried out the previous year.

In terms of sectoral contribution to trading volumes, the real estate and construction sector ranked first in terms of the value of traded shares, to reach AED 17.7 billion, equating to 55.3% of the total value of shares traded in the market. The banking sector ranked second at AED 4.1 billion (12.7%), followed by the investment and financial services sector to AED 3.4 billion (10.6%), and the transportation sector amounted to AED 3.1 billion (9.7%). The communications sector handled AED 2.3 billion (7.1%), and the insurance sector amounted to 748.2 million (2.3%). The services sector handled AED 702.4 million (2.2%), and the consumer staples and industrial sectors ranked last to reach AED 33.8 million and AED 2.1 million respectively.

The value of shares bought by foreign investors in 2011 reached AED 15.3 billion comprising 47.6% of the total value of stocks traded during the period. The value of stocks sold by foreign investors during the same period reached AED 15.1 billion comprising 47.1% of the total value of stocks traded during the period. DFM net foreign investment in-flow reached AED 164.3 million.

The value of stocks bought by institutional investors during this year reached AED 8.9 billion comprising 27.7% of the total value of stocks traded during the period. The value of stocks sold by institutional investors during the same period reached AED 8.6 billion which constitutes 26.8% of the total value of stocks traded during the period. DFM net institutional investment in-flow amounted to AED 265.5 million.

NASDAQ Dubai performance 2011

The value of equities traded on NASDAQ Dubai in 2011 was 674 million dollars, down 48% from 1.3 billion dollars in 2010. The drop was in line with other exchanges in the region, reflecting the capital markets challenges experienced during the year.

Equities traded value in December 2011 was 28.1 million dollars, down 22% from 35.8 million dollars in November 2011 and down 74% from 107.9 million dollars in December 2010.

Individual investors accounted for 5.8% of the traded value of all shares traded on NASDAQ Dubai in 2011. NASDAQ Dubai started routing all its equities trades through the trading platform of DFM in July 2010, in order to facilitate access by individual investors. Individual investors accounted for 2.7% of equities traded value in the fourth quarter of 2010.

Indices

Dubai Financial Market overall performance decreased by 17% to reach 1353.4 points at the end of the year, compared to 1630.5 points at the end of 2010.

The FTSE NASDAQ Dubai UAE 20 index ended 2011 at 1,374, down 4% from the end of November 2011 and down 24% from the end of 2010. The index tracks 20 stocks listed on DFM, the Abu Dhabi Securities Exchange and NASDAQ Dubai. The stocks are chosen for high liquidity and openness to foreign investment. Read more about the constituents of the index here

DFM Brokers’ Market share

Members Market Share (%)
EFG-Hermes Brokerage 7.27
Abu Dhabi Islamic Securities 6.05
Emirates NBD Securites LLC 5.49
Direct Broker for Financial Services 5.45
Arqaam Securities 4.93
Al Ramz Securities 4.40
Dubai Islamic Financial Services 4.38
Mashreq Securities / MASQ 4.28
Shuaa Securities 4.18
Al Dar Shares & Bonds 4.17
Members Market Share (%)
EFG-Hermes Brokerage 7.06
Direct Broker for Financial Services 6.06
Emirates NBD Securites LLC 5.59
Abu Dhabi Islamic Securities 5.44
Shuaa Securities 5.30
Abu Dhabi Financial Services /AD.F.S 4.80
Alfuttaim HC Securities 4.77
Al Ramz Securities 4.52
Safwa Islamic Financial Services 4.25
Mashreq Securities / MASQ 3.73

NASDAQ Dubai Brokers’ Market share

Members Market Share (%)
Deutsche Bank                                 35.90
Al Futtaim HC                                   19.90
Arqaam Securities                           16.80
EFG Hermes Brokerage UAE         13.20
Emirates NBD Securities                8.40
Shuaa Securities                              1.80
DBFS (Mubasher)                            1.70
Mashreq Securities                         1.00
Al Dhabi Brokerage                         0.60
Al Ramz                                             0.50
Members Market Share (%)
Arqaam Securities                         25.10
Al Futtaim HC                                 23.00
Deutsche Bank                               17.30
EFG Hermes Brokerage UAE        11.60
Shuaa Securities                            10.70
Emirates NBD Securities               4.10
DBFS (Mubasher)                           2.70
Mashreq Securities                       1.80
Al Ramz                                           1.10
Citigroup                                         1.00