The head of Dubai’s sovereign wealth fund (SWF) has called for the creation of one stock exchange in the UAE, a merger that officials have unsuccessfully been trying to engineer in the past few years.
The merger of Dubai Financial Market and Abu Dhabi Securities Exchange has been on the cards for years as the authorities hope to create a financial market with more depth that could accommodate larger listings and stimulate trade and investment flows. Despite the consensus that such a move would make sense, merger attempts so far have failed.
Mohammed al-Shaibani, chief executive of the Investment Corp of Dubai, said the country’s decision makers are still very much in favour of the merger but that the recent economic rebound meant the project has been delayed.
“In terms of strategy it is a no-brainer, there should be one stock exchange,” said al-Shaibani on the sidelines of a conference in Dubai. Among ICD’s many holdings is Borse Dubai, the holding company for DFM and Nasdaq Dubai, the emirate’s second and smaller market.
He said the reason for the delay in merging the two exchanges was due to “everybody is busy and is making good money so it’s not a priority for them to merge.”
Market activity on the local exchanges has picked up in the past year in line with the economic recovery - with Dubai being one of the world’s best performers. That resurgence has helped restore investor confidence and led to an uptick in initial public offerings on the Dubai exchange, most notably the Emaar Malls Group’s $1.58bn equity sale in recent weeks.
Al-Shaibani said eventually he would like to see one stock exchange for the entire Arab Gulf region. “Ideally I should have one stock exchange for the GCC but until that happens it will take a bit of more time,” he said.
ICD oversees some of Dubai’s most prized assets such as Emirates Airline and the biggest local lender Emirates NBD.
Asked whether ICD would consider listing some of its holdings, al-Shaibani said that option is under discussion.
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