Abu Dhabi Securities Exchange sees rise in foreign and institutional investment

Abu Dhabi Securities Exchange sees rise in foreign and institutional investment

Attempts to entice global investors to the UAE capital markets appear to be yielding results.

This week Abu Dhabi Securities Exchange’s (ADX) said that foreign and institutional investments had reached 7.9bn dirhams ($2.15bn) by end of November 2016.

Data from the exchange, which allows investors to trade shares of UAE companies, show that institutional investments in the last eleven months totaled 4.6bn dirhams while there were 3.3bn dirhams worth of investments from foreign nationals.

The ADX, like Abu Dhabi Global Market, has worked to strengthening the UEA capital market, developing a system for asset and wealth management and activating non-traditional financing methods.

The Dubai Financial Market (DFM), ADX and the Nasdaq Dubai have put together new regimes that will make IPOs a simpler process, aiming to boost both supply in terms of new listings and supporting demand from investors.

The UAE's main market watchdog has also been introducing reforms over the last few years to help widen  the Gulf state's investment appeal.

In 2014 index compiler MSCI upgraded the UAE and Qatar to emerging market status.

Last year National Bank of Abu Dhabi won approval to act as the first securities lending and borrowing agent in the United Arab Emirates.

“ADX constantly invests in the creation of an enabling market environment through the improvement of trading technology, market and reference data, as well as the implementation of market-maker schemes,” said ADX chief executive, Rashed Al Blooshi

“The upgrade of ADX on MSCI index, has helped in globally marketing the exchange by introducing it to a new group of investors most of which are institutional investors,” he added.

Al Blooshi expects further flow of foreign and institutional liquidity in the near future given that the listed companies enjoy a competitive price-earnings ratio and high returns compared to other exchanges.

“Our role in attracting foreign investment comes as part of ADX’s commitment to the growth of the financial services sector in the emirate of Abu Dhabi and the development of a sustainable financial environment under the auspices of Abu Dhabi Vision 2030,” said Al Blooshi.