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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT APRIL 2007
ABU DHABI SECURITIES MARKET
Rashid Al Bloushi
Acting Director General
The number of executed trades which rose
to 715,742 trades compared to 565,562
trades in 2005, an increase of 26.6%.
The daily average number of trades in 2006
reached 2,538 compared to 1,885 in 2005.
At the end of 2006 the Abu Dhabi Securities
Market (ADSM) had 60 companies listed,
Whereas, the number of listed companies
at the end of 2005 was 59. The index
decreased from 5,202.95 in 2005 to
2,999.66 in 2006.
The value of trading decreased from
US$ 28.507 (AED 104.7 billion) in 2005
compared to US$ 19.2 billion (AED 70.600
billion) in 2006, a decline of -32.6%.
Moreover, the daily average value of trading
in 2006 decreased to US$ 68 million
(AED 250 million) compared to US$ 95
million (AED 349 million) in 2005. In 2006
there were 282 trading days compared to
300 days in the previous year.
The number of shares traded in 2006
increased to 11 billion shares compared to
8 billion shares traded over the previous
year 2005, an increase of 36.6%. Moreover,
the daily average of traded shares also rose
to around 40 million shares compared with
27 million shares in 2005.
The number of executed trades which rose
to 715,742 trades compared to 565,562
trades in 2005, an increase of 26.6%.
The daily average number of trades in 2006
reached 2,538 compared to 1,885 in 2005.
The market capitalization of companies
listed at the ADSM at the end of 2006
was US$ 80 billion (AED 296,5 billion),
compared to US$ 132.4 billion (AED 486.3
billion) at the end of 2005 a decrease of
64%.
HISTORY AND DEVELOPMENT
Trading securities in the United Arab
Emirates dates back to the early 1960s
when public shareholding companies
started to exist. It was a generic and
haphazard era with a securities market
created and operated by the mediation of
brokerage firms.
Trading in such an unstructured environment
had created flaws and imbalances in the
market, especially with the absence of a
proper mechanism to conclusively
determine the value of securities, the
absence of supervision and control of
brokerage firms as well as the lack of
transparency and disclosure by the traded
companies.
This tremulous situation had an adverse
impact in establishing fair policy for
evaluating securities, and resulted in severe
fluctuations in the market. In view of this
chaos values of most of the shares were
overstated leading to consequences and
heavy losses to the investors.
Taking the above facts into consideration,
the issue of regulating the securities market
became significantly important with a view to
its crucial role in the domestic economy.
Plans have been set up to organize the
market in order to ensure integrity and
smoothness of trading and the movements
of prices based on the power of supply and
demand and the information disclosed by
the listed companies. Within this framework,
intensive efforts resulted in the promulgation
of Law No. (4) of 2000 concerning the
establishment of the UAE Securities &
Commodities Authority and the
establishment of securities market.
FUTURE OUTLOOK
In 2007, the ADSM plans to:
• continue activities to support growth in
listings, turnover and liquidity:
• encourage listing of family companies
and foreign companies
• increase system capacity to cope with
growing market volumes
• enhance IT processes and information
distribution
• enhance market standards in the areas of:
• corporate governance
• capital adequacy and surveillance of
brokers
• broker education and qualification
• further enhance registry and CSD services
• expand the bond market
• link trading with other international
Securities Markets, and;
• strengthen regulations and rules including:
• commercial and capital market law
• securities regulation
• ADSM rules for listing, brokers and
trading
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