The long-term objectives of diversification, improving transparency and of leading the development of the capital markets in the GCC region remain in place for Abu Dhabi Securities Exchange (ADX) despite 2008 being a challenging year for financial markets across the globe said Tom Healy, ADX Chief Executive.
Announcing a round-up of trading and investment statistics, and achievements for 2008, Mr Healy said that last year was a mixed one for ADX, with performance for the first half of the year being exceptionally strong, but that in the second half all GCC exchanges succumbed to global events.
Trading Volumes and Value
“The first six months of 2008 saw an unprecedented rise in the volume and value of trading on ADX, with volumes increasing by 93% compared to the same period in 2007”, said Mr Healy. “Also, the total value of equities trading for the whole of 2008 showed an increase of 32% compared to 2007, with AED232 billion worth of shares changing hands compared to AED175 billion the year before. Overall volumes for 2008 however dropped by 4% compared to 2007.”
Companies and Sectors
Etisalat remained the largest company listed on ADX by market capitalisation, followed by National Bank of Abu Dhabi, QTel, First Gulf Bank and Arkan. The real estate sector however accounted for most of the trading value, followed by banks & financial services and then energy. In terms of individual listed companies traded, ALDAR remained the highest in terms of trading value, with Arkan in second and Sorouh in third.
Institutional Investors
“2008 also saw an increase in investors from 860,000 in 2007 to 877,000 in 2008 and, of particular importance, was an increase in activity from institutional investors”, Mr Healy continued.
“Increasing institutional participation is an important objective for ADX as it will stabilise the market in the longer-term,” he explained. The number of institutional investors increased 34% from 1,623 in 2007 to 2,472 in 2008 and their trading value increased from 26% to 32% of total market trading value.
Foreign Investors
The proportion of shares owned by foreign investors declined in 2008, accounting for 9% compared to 13% in 2007. Investors from the UK remained the largest after UAE Nationals, followed by investors from Qatar, Saudi Arabia, Kuwait and Luxembourg. “Despite the increase in 2007 and subsequent decrease last year, foreign investors have always been a relatively small part of the ADX market”, commented Mr Healy.
Achievements
Mr Healy emphasised that ADX made considerable achievements in 2008. In particular he highlighted initiatives to provide greater transparency and improved corporate governance. “Ahead of third quarter financial results for example, we asked our listed companies to publish their statements as soon as possible to prevent rumours spreading in the markets”, Mr Healy explained.
“ADX has also been working with the Securities and Commodities Authority (SCA) and its listed companies to implement the new Corporate Governance Code”, he said. “We have improved the e-services available on our website, signed custody agreements with three international banks, signed and implemented agreements with international stock exchanges including NYSE Euronext, and the Tokyo, Karachi and Taiwan Exchanges, and hosted the Annual General Assembly of the Federation of Euro-Asian Stock Exchanges.”
Outlook
“In line with our 5 year strategy and the Government’s Economic Vision: 2030, ADX will continue to focus on diversification and sustainable growth so we reach our goal of becoming the market of choice in this region,” said Healy. “Our priorities for 2009 are to develop markets for Exchange Traded Funds, debt securities and derivatives as well continuing to enhance transparency and the regulatory environment for the benefit of all our stakeholders.”