Dubai Financial Market (DFM), the exchange subsidiary of government holding company Borse Dubai, is to collaborate with the Egyptian Exchange to set up a comprehensive framework that will pave the way for listed companies, specifically those with significant operations in the United Arab Emirates (UAE) and Egypt, to dually list their shares.
This initial agreement between the two sides is the outcome of discussions between the Egyptian Exchange's delegation, headed by Mohammed Abdulsalam, chairman of the Egyptian Exchange, with Essa Kazim, managing director and CEO, DFM.
“We are considering a memorandum of understanding that will outline the areas of cooperation, the necessary mechanisms and the timeframe to achieve our goals in addition to sharing expertise in information technology and training,” Kazim said. “The Egyptian market is one of the main international markets for UAE companies including many DFM listed companies. Similarly, there are many Egyptian companies that have major operations in the UAE. Those companies are ideal for potential dual listings, and we are going to have the suitable framework to see this happening at the earliest.”
DFM already has 20 listings from Kuwait, Bahrain, Sultanate of Oman and Sudan, Kazim he noted.
“We may see important DFM listed companies such as the real estate companies go for a dual listing on the Egyptian Exchange and major companies from food industries and services opt for a dual listing on DFM,” said Abdulsalam. “Without having the highest levels of transparency, investors will not be encouraged to trade on dual listed stocks. We will further collaborate to study the best approach to apply corporate actions such as cash dividend and capital increase.”
DFM bought exchange operator Nasdaq OMX's one-third stake in Nasdaq Dubai in December 2009, and moved it onto DFM's X-Stream platform in July 2010 as part of a plan to increase retail trading volumes and strengthen the market.
Individual investors on NASDAQ Dubai increased their share of equities traded value on the exchange to 8.9% in April 2011, up from 5.7% in March 2011.
The value of equities trades by individuals rose to US$6.4 million in April 2011, up 35% from US$4.75 million dollars in March 2011. Total equities traded value – by institutions and individuals – fell 13% in the same period, to reach US$72 million dollars in April.
The FTSE NASDAQ Dubai UAE 20 index ended April 2011 at 1,778, up 7% from the end of March and down 1% from the end of 2010. The index tracks 20 liquid stocks listed on DFM, the Abu Dhabi Securities Exchange and NASDAQ Dubai. It has been designed as a hedging and investment mechanism for Gulf Cooperation Council and international investors.