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The St. Regis Saadiyat Island Hotel in Abu Dhabi witnessed today the launching of the "Market Maker 2014 Conference" which was organized by Abu Dhabi Securities Exchange ADX under the title, "The market maker, and a step towards boosting UAE markets". The conference was held with the participation of more than 300 local, regional and international financial market experts and stakeholders.
In the presence of H.E. Sultan Nasser Al Sowaidi, Governor of the UAE Central Bank, H.E Nasser Ahmed Alsowaidi, the Chairman of Abu Dhabi Securities Exchange in an opening speech of the Conference, said that Abu Dhabi Securities Exchange since its establishment on 15 April 2000, as the official financial market of the Emirate of Abu Dhabi, has accomplished many achievements, thanks to the efforts of developers and the confidence of investors in the economic performance of the Emirate of Abu Dhabi.
H.E. noted that these achievements were always backed by the support of the prudent Government of Abu Dhabi, hailing its efforts to enhance the business environment in the Emirate, by providing the means, tools which enabled ADX to stand firm in face of crisis, and save the interests of the national economy, in accordance with the principles and rules that guarantee, safety, accurate performance, and protection of investors within the legal environment of disclosure, transparency and credibility, which increased confidence and strengthened financial and economic stability.
"We in the Government of the Emirate of Abu Dhabi look forward within the determinants of the "Abu Dhabi Economic Vision 2030’, to take a leading global position, which reflects Abu ADX ambition to achieve a leading global position among the markets of the region. ADX today is equipped with the latest trading and monitoring systems that have proved effective in recently run tests, using the (X-Stream) trading of NASDAQ OMX, which we will soon officially launch.", Alsowaidi was quoted as saying.
Nasser Alsowaidi mentioned that these accomplishments came in harmony with the new legislative system approved by the Securities & Commodities Authority recently, which covered the market maker system, lending and borrowing of securities, short selling, delivery versus payment system, among other issues; where the market completed the regulatory system and accompanying market operation requirements.
H.E. Nasser Alsowaidi said that ADX international achievements culminated at a global level in several areas, especially the successful upgrading to emerging markets class in 2013, as Morgan Stanley Capital International Inc (MSCI) announced theupgrading of UAE local markets to Emerging Markets, according to its classification indicators as of March 2014; in addition to a similar resolution by Standard & Poors.
Alsowaidi added that Abu Dhabi has started since January 2013 to implement the delivery versus payment system, which is applied in many developed and emerging markets, whereby securities are simultaneously delivered against payment.
Alsowaidi stressed ADX efforts and endeavors in educating investors and beneficiaries in several areas, noting that ADX total number of investors exceeded 900,000 investor at the end of 2012, with citizens investors comprising (61.5%) of total investors.
In this context, Alsowaidi referred to the progress achieved by the market index in 2013 when it registered 36%, to mark the third best market performance in terms of the rising indicator, accompanied by the rise in trading value for the same year, which reached AED 85 billion, compared to about AED 22 billion in 2012.
This performance would not have not been achieved, without the sound policies and strategic plans applied in past periods, and the persistence of Abu Dhabi, which aims at achieving a great leap forward towards realizing an economic growth which exceeds 7% this year, only 1% higher from last year's growth rate, which is considered a positive rate in view of anticipated economic growth indicators for the countries of the world, especially major industrial countries and emerging markets.
Alsowaidi, explained that Abu Dhabi development plans for this year focus on strengthening the role of non-oil economic sectors, especially industry, transport, shipping, tourism, finance and business sectors, besides attracting more foreign investments and adopting new applications for moving towards the knowledge-based economy.
"This path is supported and furthered by government spending on infrastructure and key projects,. Abu Dhabi government plan includes the implementation of a package of investment projects worth about AED 330 billion ($100 billion) over the next five years, aimed at modernizing and expanding vital infrastructure, building new facilities to serve different sectors such as health, education, housing, clean and renewable energy, transport and communications, building railways and expansion of Abu Dhabi airport", Alsowaidi said.
H.E Nasser Alsowaidi noted that Abu Dhabi GDP in current prices amounted to AED 911.6 billion at the end of 2012, marking a growth rate of 7.7%, compared to AED 846.7 billion in 2011. Estimates also indicated a GDP growth in 2013 by over 5%.
Regarding future prospects, Nasser Alsowaidi said that according to indicators the Department of Economic Development, Abu Dhabi's GDP during the period 2013-2017 would expectedly grow by more than 7% according to the preliminary indicators for the second Five-Year Plan; as the First Five-Year plan for the period 2009-2012 had identified an average growth rate of 6.7%
H.E. said that studies indicated that the government support is expected to be permanent and ongoing, to accelerate economic growth, and it will be one of the most important engines of economic growth during period 2014-2017, which will propel continued growth in the Emirate, at high frequency, and meet the aspirations of the citizens in building a strong economic base.
Abu Dhabi's economic development paths, according to H.E. Nasser Alsowaidi, have been characterized in recent years by focusing on direct investments in non-oil activities, to realize diversification of the economic base and income sources; as these trends were coupled with the extensive efforts of the Government to encourage the private sector and small and medium-sized enterprises in particular, to enable participation in the process of development, by setting an inviting and supportive environment for business and investment projects.
Alsowaidi added that the Emirate of Abu Dhabi targets a 9% cumulative annual rate of growth in the industrial sector, and expects industry to contribute to the total GDP of the Emirate by 24% during the period 2014-2017. The most important targeted industrial sectors include aluminum industries, iron and steel, building materials, transportation, aviation, semiconductors and renewable energy.
Nasser Alsowaidi noted that ADX welcomes the recommendations of all participants in this important Conference, to further the development and advancement of Abu Dhabi and UAE's economies.
The Market Maker Conference hosted Mr. Michael Foot the Global Vice Chairman of Promontory Financial Group (UK) Ltd, who previously worked as Director of Banking Supervision at the Bank of England (Central Bank), and served for two terms as Director of the British Financial Services Authority FSA. Mr. Foot addressed theConference, saying that financial markets should continue to enjoy dynamism and innovation, as it was the case over the past decades, stressing the importance of remaining vigilant about the possibility of other temporary crises in global markets, bringing to attention the case of Lehman Brothers in 2008.
Mr. Foot noted that challenges and global fluctuations may affect small local markets, stressing that one the important lessons learned, was unequivocally the merger of markets.
Mr. Foot emphasized the importance of adopting international best practices in corporate governance, information technology and market systems as well as the development of settlement systems, focusing on the importance of transparency in trading before and after the opening of the trading session, which will reinforce pricing of securities.
Her Excellency Maryam Al-Suwaidi, Deputy Chief Executive Officer (CEO) forLicensing, Supervision and Enforcement Affairs at the Securities and Commodities Authority, chaired the first session of the Conference. The session involved the speakers, Mr. Huseyin Erkan, the Secretary General of the World Federation of Exchanges (WFE); Mr. Robert Ansari, Dubai-based Executive Director at Morgan Stanley (MSCI), and Mr. Jeff Singer the Chief Executive of the Dubai International Financial Centre (DIFC) and Former Chairman of NASDAQ Dubai.
Mr. Huseyin Erkan, the WEF Secretary General, highlighted tools and legislation requires to develop regional markets, where the ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...
Mr. Robert Ansari, the Dubai-based Executive Director at Morgan Stanley, reviewed the methodology which governs the market classification index, with emphasis on the 2013 decision to upgrade local markets to emerging markets as of may 2014, according to MSCI.
Mr. Ansari said that the MSCI Index, depends on transparency and aims at measuring investment opportunities for investors, explaining the methodologies and techniques underlying the Morgan Stanley indicators, based on several criteria including economic development, size and liquidity requirements, in addition to measuring the ease of access to the financial market.
Mr. Jeff Singer, addressed the challenges facing Arab markets...................................
The second session of the conference was presided by Mr. Jalal Khader of the Union National Bank, which involved Dr. Monzer Barakat, the Advisor at the Securities and Commodities Authority, and Mr. Jobest Mueller Trimbosch, the German market making expert, who occupied high positions in market making companies and institutions in Germany and abroad, as well as Mr. Jean-Philippe Cavrois, the Secretary-General of Tradition Securities and Futures, France.
Dr. Monzer Barakat addressed issues concerning the types and licensing procedures of market making companies; and stressed that the presence of market makers in domestic markets will help in developing these markets, recommending that leading financial firms should step in as leaders in market making.
The market making German expert, Mr. Mueller Trimbosch, emphasized the role of the market maker in strengthening liquidity in markets, focusing on the technical and legal requirements for the functioning of market makers, in addition to capital and risk management, as well as the technical requirements for market making, and the importance of maintaining the differences between buying and selling rates.
Mr. Jean-Philippe Cavrois, Secretary General of Tradition Securities and Futures, France which is the third largest company in the world for independent mediation, reviewed the technical details relating to the functions of the market maker, and liquidity providers especially in Euronext (European Electronic Stock Exchange) stating that there is no one way to supply liquidity, or maintain relationships with a listed company, as all this comes according to necessity and requirements; and that markets periodically review the performance of market makers.
In turn the Securities Expert Mr. Mohammad Yasin, chaired the third session of the conference which involved a discussion with the participation of Dr. Abdul Salam Al Blooshi ADX Legal Advisor, Mr. Gary Anderson, CEO of Dubai Gold and Commodities Exchange (DGCX), and Mr. Galen Moore of the Financial Markets Section at the National Bank of Abu Dhabi.............................................
It should be noted that the Market Makers Conference 2014, was organized under the platinum sponsorship of both the National Bank of Abu Dhabi and Union National Bank, and the golden sponsorship of Abu Dhabi Commercial Bank. At the end of the conference, H.E. Rashed Al Baloushi, CEO of ADX, held a press conference confirming the importance of building trust in the Securities and to comply with the needs of the Market agents; adding that the markets will comply constantly with the international best standards.
Al Baloushi emphasized the importance of emplacing trustworthy mechanisms to resolve financial disputes and to comply with the MSCI standards regarding its indices which depend on a number of principles most importantly the economic development and the volume and requirements of liquidity; in addition to measuring the easiness of accessing the financial market and using SWIFT platform to reach out between brokers and brokerage firms and investors instead of using the email and the telephone.
The listed companies requesting to be listed outside of the UAE should realize the importance of getting listed locally in order for institutional investors to base their decisions on data and the status of the company and not on the venue of its enlistment.
Al Baloushi also mentioned that raising the markets to reach a higher classification category according to MSCI standards depends on the evaluations of the institutional investors and on factors such as liquidity, commitment and services and this might need 3 to 5 years.
He confirmed the importance of focusing, developing, and dealing with Islamic financial products where it is considered one of the main factors to develop the markets. He also referred to the importance of cooperation with the markets and the global and regional entities especially in the field of surveillance and investor protection as well as the influx of capital and the new products.
Regarding the market maker, Al Balouhsi said that the presence of the market maker will promote the performance of the listed companies in the markets with the necessity to have the banks and the big companies take the initiative in establishing companies for market making.
He added that it is a must to alleviate the needed collaterals from the market maker according to the systems, clarifying that there are different ways to provide liquidity and that the relationship with the listed companies comes according to the needs and the requirements and that the markets review regularly the work of the market maker
He ascertained the importance of transparency in trading before and after the opening of the trading sessions which promote the pricing of the security.
