Abu Dhabi Securities Exchange sees rise in foreign and institutional investment

Attempts to entice globalinvestors 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, whichallows investors to trade shares of UAE companies, show that institutionalinvestments 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 GlobalMarket, has worked to strengthening the UEA capital market, developing a systemfor asset and wealth management and activating non-traditional financingmethods.

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

The UAE's main market watchdoghas also been introducing reforms over the last few years to help widen  the Gulfstate's investment appeal.

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

Last year National Bank of AbuDhabi won approval to act as the first securities lending and borrowing agentin the United Arab Emirates.

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

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

Al Blooshi expects furtherflow of foreign and institutional liquidity in the near future given that thelisted companies enjoy a competitive price-earnings ratio and highreturns compared to other exchanges.

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