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Represented by its CEO, Mr. / Rashid Al Baloushi, Abu Dhabi Securities Exchange participated in the Annual Promotional Conference for Arab Exchanges which was held in London between January 20th and 21st this year. The Conference brought together a group of representatives of the Arab exchanges, as well as a selection of entrepreneurs both from the Middle East and Europe. Also, over 120 participants from the different international investment institutions attended the event. The total asset value that these institutions manage is over 2 trillion dollars. These institutions took part in the Conference to become familiar with the commercial opportunities and the investment atmosphere of the participating exchanges.
Through its participation in the Conference, Abu Dhabi Securities Exchange aims to establish communication channels with the new investors, financial managers, assets managers and the investments management companies in order to discuss cooperation opportunities and familiarize the investors and foreign companies with the scale of development that the Emirate of Abu Dhabi witnesses these days.
Mr. / Rashid Al Baloushi delivered an introductory presentation in which he discussed the financial and economic conditions of the country and the Emirate. He also shed light on Abu Dhabi Securities Exchange’s performance and achievements over the last years.
The CEO of Abu Dhabi Securities Exchange further explained in details that the national economy was able to maintain its stability over the last years despite the state of instability and fluctuation that most of the world’s economies experience today. He said that the State’s Gross Domestic Product significantly increased from 510.9 billion dirhams during the year 2006 to 1.47 trillion dirhams by the end of the year 2014, and then increased to 1.58 trillion dirhams in 2015 according to the statistics issued by the Ministry of Economy. He added that the International Monetary Fund predicts a 3.1% growth in the national economy next year, and also predicted that the non-oil sector would grow by 3.4 and 3.6% in 2015 and 2016, respectively.
Al Baloushi further said that: “Although the International Monetary Fund has lowered its expectations and predictions regarding global growth in 2016 and warned that great dangers threaten the world’s economy because of the slow growth of the Chinese economy, deflation in Brazil and the decline in the world’s oil prices, Standard & Poor's Financial Services, which specializes in credit rating, expects that the Emirati economy would maintain its strong growth in 2016 despite all these challenges. This reflects the strength and durability that this economy enjoys and its ability to continue growing by relying on its own capabilities.”
Moreover, Al Baloushi explained that the UAE has occupied an advanced position on the global level and was able to surpass many of the world’s leading economies last year. The UAE was ranked 17th in the Global Competitiveness Report that was issued by the World Economic Forum. Also, the UAE’s financial markets were ranked 20th among a total of 148 markets that were listed in the Financial Markets Development Index. The Global Competitiveness Report described the UAE’s markets as being “advanced and deep”.
He also mentioned that: “The Emirate of Abu Dhabi’s economy was not very far from the general growth that the State’s economy witnessed, especially in light of the announcement by the Statistics Center in Abu Dhabi which stated that based on current prices Abu Dhabi’s Gross Domestic Product has reached 960 billion dirhams in 2014 compared to 931 billion dirhams in 2013 based on current prices. This shows that it has multiplied 5 times since the beginning of the last decade when it was only 177.8 billion dirhams in 2001. Al Baloushi emphasized that the government of Abu Dhabi will be committed to invest nearly 100 billion dollars in the major infrastructure projects by 2017.”
And as he described further, the Emirate of Abu Dhabi has been ranked 26 out of 83 financial centers on the Global Financial Centers Index (GFCI) issued in 2015, meaning it surpassed both Beijing and Vienna which were ranked 29th and 30th, respectively.
“The Emirate of Abu Dhabi has adopted a well-planned and organized approach to diversify its economic resources and balance the contribution of the non-oil gross domestic product in order to achieve the transformation into a sustainable knowledge-based economy. This is regarded as one of the long-term goals of the Emirate. This is clearly seen through the data issued by the Emirate’s Statistics Center which shows a decrease in the contribution of the oil and natural gas extraction activity in the Gross Domestic Product by 7.3% in 2014. The oil and natural gas contribution to the Gross Domestic Product has decreased from 54.9% in 2013 to 50.9% in 2014 based on current prices, which indicates a significant decrease in the Emirate’s economy’s dependence on extraction/oil industries.” Al Baloushi explained.
Furthermore, Al Baloushi discussed the role of Abu Dhabi Securities Exchange in the national economy and mentioned that enabling the financial markets to become the main financier of economic projects and sectors is considered one of the seven areas of interest of Abu Dhabi’s economic policy. Additionally, the increasing financing of economic sectors and projects is also one of the main goals of Abu Dhabi Vision 2030. This requires the activation of a number of non-conventional financing tools, especially in light of the projects’ increasing need for more flexible financing resources that respond to the requirements of their growth and expansion.
Moreover, Al Baloushi pointed out that the value of shares traded in Abu Dhabi Securities Exchange in 2014 represented 15.2% of the Gross Domestic Product of the Emirate of Abu Dhabi for the same year according to the data issued by the Emirate’s Statistics Center. The Center also estimated that the shares’ market value in Abu Dhabi Securities Exchange represents 43.9% of Abu Dhabi’s Gross Domestic Product based on current prices in 2014.
The CEO also highlighted the Exchange’s performance over last year and explained that the net foreign investment has increased by 65% in 2015, which means in reached 5.8 billion dirhams in 2015 compared to 3.5 billion dirhams in 2014. He also added that institutional investment reached a net trading of 7.2 billion dirhams in 2015 compared to 2.1 billion dirhams in 2014, indicating an increase of 243%. According to that, institutional investment represents nearly 47.7% of the total trading value in the market compared to 52.3% for individuals in 2015. Al Baloushi also said that the market value of the shares owned by foreign investors, non-locals, in Abu Dhabi Exchange reached 40.1 billion dirhams in 2015 compared to 37.2 billion dirhams in late 2014, indicating an increase by 8%. Additionally, the number of foreign investment institutions in the Exchange has increased since its establishment till the end of 2015 which reached 4737 institutions.
“The investments that flowed into the market were mostly foreign, which proves that the financial and economic conditions in the State are in good status. This also reflects the positive view and optimism regarding the performance of the Emirate’s economy and its various sectors, and also reflects the wise policies that the government follows in running the economy over the last years which meant the national economy was safe from any risks or fluctuations.” Al Baloushi said.
He also explained that Abu Dhabi Securities Exchange’s performance was the best of all other exchanges in the Gulf Cooperation countries in 2015 based on the Arab Monetary Fund’s report. The Exchange’s index reported a decrease by 4.9% during the year, whereas the foreigners’ transactions share in the Exchange where the biggest compared to other Arab exchanges. This showed that the performance of the listed companies was positive and their market value exceeded 447 billion dirhams in late 2015, whereas their profits exceeded 30.9 billion dirhams by the end of the third quarter of 2015. The services sector had the largest share in profits with an increase of 25.7% for the same period of 2014, followed by the industries sector with an increase of 19.7%, then the consumer goods sector with an increase of 17.5%. Also, the distributions of these companies’ profits reached 20.8 billion dirhams in 2015, indicating an increase by 18.1% compared to the previous year.
Al Baloushi concluded his presentation by declaring that Abu Dhabi Securities Exchange has won the Most Innovative Exchange in the GCC Award in 2015 which is granted annually by Capital Finance International in appreciation of the Exchange’s major achievements over the last years with respect to innovation. Innovation is a high priority in Abu Dhabi Securities Exchange’s work strategy.
