mast-head

NASDAQ Dubai plans to increase custody flexibility

NASDAQ Dubai is amending its Business Rules to allow holders of Sukuk and conventional bonds to enjoy more flexibility in the way they manage custody. The change would support NASDAQ Dubai’s growth as a leading listing venue for debt products.

The amendment would abolish the existing Business Rules requirement that debt holdings be kept in NASDAQ Dubai’s Central Securities Depository (CSD), by allowing investors to choose another central securities depository instead if they prefer. Following a public consultation on the proposal that ended on March 8, 2012, NASDAQ Dubai is preparing to soon make the amendment effective, subject to regulatory approval.

NASDAQ Dubai is the only exchange in the Middle East that has direct access to Euroclear, an international central securities depository. This provides an easy transaction process with the NASDAQ Dubai CSD for international and regional investors. NASDAQ Dubai is the region’s largest exchange for Sukuk, with 15 listings with a total nominal value of 10.6 billion dollars. It has seven conventional bond listings with a total nominal value of 5.1 billion dollars. The amendment would also apply to exchange traded commodities, structured products and collective investment funds.

NASDAQ Dubai’s UAE 20 share index surges

The FTSE NASDAQ Dubai UAE 20 index surged 19% in February to end the month at 1,766, extending its increase in 2012 to 29% from the end of December 2011. 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.

The rise reflected the strong increase in UAE share prices this year. The FTSE NASDAQ Dubai UAE 20 index was created jointly by FTSE International and NASDAQ Dubai as an investment and risk management tool. In 2008 NASDAQ Dubai created futures contracts on the index giving market participants the opportunity to benefit from price movements in the underlying shares. These equity derivatives are tradable on the exchange and cleared through the NASDAQ Dubai central securities depositary which ensures that any counterparty risk is mitigated via the exchange’s best in class clearing system.

Craig Hewett, Head of Business Development at NASDAQ Dubai, said: “Futures on the FTSE NASDAQ Dubai UAE 20 index can serve as an excellent hedging mechanism for investors in the UAE and other Middle East markets as well as providing investment opportunities based on the performance of underlying UAE stocks. The development of an equity derivatives market can also increase trading in the underlying shares. NASDAQ Dubai looks forward to significantly expanding its equity derivatives market in 2012 in conjunction with new and existing market participants.”

Jonathan Cooper, Managing Director, Middle East & Africa at FTSE Group said: “The FTSE NASDAQ Dubai UAE 20 index has been designed to offer a broad based investment opportunity for both GCC and international investors. The creation of tradable futures contracts on the index further enhances the inward investment flows into the region and the growth of regional capital markets”.

The value of equities traded on NASDAQ Dubai in February 2012 reached 37.9 million dollars, up 8% from 35 million dollars in January. Equities traded value in February 2011 was 71 million dollars. 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.


Dubai Financial Market (PJSC) records net profit of AED 8 million in 2011

Dubai Financial Market (PJSC) announced its results for the financial year ending 31st December 2011. The company recorded a net profit of AED 8 million for the year 2011, compared to a net profit of AED 89.9 million in 2010, whilst, the DFM Group (including its subsidiary NASDAQ Dubai) recorded a net loss of AED 6.9 million in 2011, compared to a net profit of AED 78.9 million in 2010. Total revenues reached to AED 176.5 million at the end of 2011, compared to AED 260.5 million in 2010. The total revenue comprised of AED 119.6 million operational revenues and AED 56.9 million of investment revenues and others.

DFM makes history during February 2012

The Dubai Financial Market has led the best performing major exchanges in the world during the month of February 2012, with the DFM General Index soaring 20.5% up to 1730.4 points compared to its level at the end of January 2012. Eight out of the nine indices represented on DFM ended the month in the green, with the Services sector increasing the most by 159.7%, followed by the Real Estate and Financial Services sectors by 37% and 33% respectively. The Consumer Staples sector has not witnessed any changes during this month.

The market capitalization increased at the end of February by 7.8%, amounting to AED 199.4 billion compared to AED 185 billion. The value of shares traded during this month reached AED 8.7 billion, compared to AED 2.2 billion recorded during January, an increase of 304%. The number of shares traded increased by 267.4% to reach 7.6 billion shares during February, compared to 2.1 billion shares traded during January. The number of transactions executed during February increased by 183.8% to reach 102,600 compared to 36,100 deals carried out during the previous month.

As for the sectors’ contribution to trading volumes, the Real Estate and Construction sector ranked first in terms of the value of traded shares, to reach AED 4.9 billion (56.2%) of the total value of shares traded in the market. The Banking sector ranked second at AED 1.4 billion (16.4%), followed by the Financial Services and Investment sector with AED 660.8 million (7.6%), and the Transportation sector with AED 547.1 million (6.3%). The Services sector contributed AED 540 million (6.2%), the Insurance sector AED 400.7 million ( 4.6%) and the Telecommunication sector AED 252.3 million (2.9%).

The value of shares bought by foreign investors during February reached AED 3.508 billion comprising 40.1% of the total value of shares traded. The value of shares sold by foreign investors during the same period reached AED 3.723 billion comprising 42.6% of the total value traded. DFM net foreign investment out-flow reached AED 215.5 million.

The value of stocks bought by institutional investors during this month reached AED 2.005 billion comprising 22.9% of the total value of shares traded. The value of shares sold by institutional investors during the same period reached AED 1.623 billion which constitutes 18.6% of the total value traded. DFM net institutional investment in-flow amounted to AED 382 million.

Indices

Dubai Financial Market General Index increased by 20.5% to 1730.4 points at the end of February compared to 1435.7 points at the end of January.

The FTSE NASDAQ Dubai UAE 20 index ended February 2012 at 1,766, up 19% from the end of January 2011 and up 29% from the end of December 2011. 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 here

Brokers’ Market share - February 2012

Members Market Share by Value (%)
Al Ramz Securities 7.78
Abu Dhabi Financial Services / A.D.F.S 7.74
Emirates NBD Securities LLC 6.13
Shuaa Securities 5.72
Direct Broker for Financial Services 5.29
Al Dar Shares & Bonds 5.23
Daman Securities Center 5.15
EFG-Hermes Brokerage 4.96
Abu Dhabi Islamic Securities 4.87
Dubai Islamic Financial Services 3.28
Members Market Share by Value (%)
EFG-Hermes Brokerage UAE 30.48
Deutsche Bank 28.45
Arqaam Securities 23.56
Shuaa Securities 8.90
Emirates NBD Securities LLC 4.80
Union Brokerage 1.24
Mashreq Securities 1.22
Direct Broker for Financial Services 0.83
Al Dhabi Brokerage 0.30
Naeem Shares & Bonds 0.11