NASDAQ Dubai’s management is adopting a growth strategy based on partnerships rather than competition with local markets. Its stock exchange model is gaining the legitimacy of the regional financial market with legislations that are compliant with international standards, providing securities that meet the needs of companies in the region to expand, as well as its ability to secure funds from international investors. NASDAQ CEO Hamed Ali believes there is no success without the benefit of all parties in the market system.
Ali revealed that a meeting was held with several Egyptian listed companies, days before the process of double listing on NASDAQ Dubai was promoted. He also explained the funding opportunities available and the tools that companies could benefit from in the market.
Ali said Egyptian companies have many success stories worth marketing to global investors. He pointed out that a large number of Egyptian companies are in line with the terms of listing, trading and placing in NASDAQ Dubai stock exchange. He also expected more than one Egyptian company to be included in the market within six to 12 months.
This year the dual listing of Orascom Construction Industries (OCI) made it the first Egyptian company in NASDAQ Dubai, which is a model for local companies to list in the coming period.
He pointed out that companies with foreign activities in more than one country and good growth rates capture the attention of investors, whether regionally or internationally. NASDAQ Dubai’s is a strong platform to attract investors.
Ali disclosed that a second financial broker representing Egyptian companies has approached to obtain membership in NASDAQ Dubai. He noted that the membership terms are applicable to a large number of Egyptian companies due to the legislations, organisational rules, and strong standards applied.
This is in addition to the Linkage and Cooperation Agreement signed between NASDAQ Dubai and Misr for Central Clearing, Depository and Registry’s (MCDR), which facilitates brokers’ work. EFG-Hermes is the first Egyptian broker at NASDAQ Dubai.
Ali said that NASDAQ Dubai’s interest in the Egyptian market is due to several reasons. Most importantly of these is the expected economic growth as well as international investors’ interest in the major projects that were presented at the Sharm El-Sheikh Economic Summit in March. He noted the optimism of investors and companies with Egypt’s revealed visions and time-bound projects to encourage investment in the country. What matters to investors are decisive decisions that build their confidence about the future of their investments.
The CEO did not give significant weight to the political crises the region is going through and their impact on NASDAQ Dubai. He mentioned that the variety of investors in the market help in growth, adding that what the market issued more than $14bn in 2014, therefore it has the ability to grow. He also expected a number of companies from the different markets in the region to be listed next period. The indicators of the first quarter of this year were good in respect to listing and trading, Ali said.
Ali added that NASDAQ Dubai, launched in 2005, stands as a gateway to the region for international institutions and investors, by executing the best legislations and practices that are followed by international stock markets. This allows companies listed on NASDAQ Dubai to easily apply the same standards with any international stock market they are willing to be present in. An amount of liquidity is also provided for investing in listed securities through an account that allows investors to trade in the Dubai Financial Market (DFM) and NASDAQ Dubai. It allows companies in NASDAQ to make use of the investors’ database in DFM.
NASDAQ’s membership in Clearstream and Euroclear allows investors around the world to easily conduct settlement, while brokers do not need to modify their rules regarding settlements.
NASDAQ Dubai exceeds the limitations of regulating stocks present in a lot of local stock markets through providing a package of products that allows companies to have greater opportunities in respect of obtaining more variable fund that suits their needs and meets the different investment policies of investors. This is through the multiplicity of securities that can be listed, including shares, warrants, indexes, and so on, which contributed to listing 59 securities with a capital value amounting to $78bn. These securities included 11 stocks, 35 warrants and 15 bonds. There are 33 brokers to date; half of them are affiliated to international markets, in addition to the local and regional markets.
Consistent with the view of Sheikh Mohammed Bin Rashid, Vice President and ruler of Dubai, regarding making Dubai the capital of the Islamic economy, NASDAQ Dubai launched NASDAQ Dubai Murabaha Platform in order to meet the financial and investment needs of borrowers, individuals and companies.
Ali said that NASDAQ Dubai focuses on working on markets like Egypt to develop Islamic economy and create new products that suit the market needs and trading volumes.
NASDAQ Dubai confirms that its principal goal is the success of its partners. NASDAQ is also aware that the dual listing requires a main strong stock market through NASDAQ Dubai’s platform. The company grows through two markets by listing which consists of a partnership between the two markets and the company in order to attract more pumps from investors in various regional and international stock markets.
Concerning the effect of opening the Saudi market, the biggest market in the zone for foreigners, Ali said that markets benefit from each other. He does not expect any negative impact when it comes to NASDAQ Dubai’s plans, especially that the company offers various services concerning stock market, infrastructure and legislations, which means that all these services are factors that affect the investors’ choices and decision.
Ali also confirmed that dual listing is the first step for the companies to benefit from NASDAQ Dubai’s offers to fulfil their financial and investment needs.
The CEO stressed on the importance of cooperation between the stock market and the Egyptian entities as well as their readiness to offer NASDAQ Dubai Murabaha Platform to the Egyptian market. The platform would make use of certificates that match the laws of Islamic Shari’a, which are established for the main assets of the stock market.
Islamic Banks and financial Islamic companies as well as their clients can benefit from this platform through trading certificates.
Ali pointed out that the majority of the stock markets in the region aim to renew and develop. On the other hand, the variety of the financial tools depends on the investors’ demand for these products. NASDAQ Dubai seeks to offer the investors as many choices as it can, due to the high level of the markets with which it deals, whether on the regional or the international level.
Recently, MCDR and NASDAQ Dubai have signed an agreement on mutual cooperation to establish technical relations in order to help the companies that seek dual listing according to their shares in both stock exchange markets, the Egyptian Stock Exchange (EGX) and NASDAQ Dubai.
The agreement also aims to establish operational relations to support smooth trading in the stock market of both countries. Based on this agreement, MCDR and NASDAQ Dubai targets boosting cooperation between capital markets in the UAE and Egypt on a wide scale.
DFM is the main partner for NASDAQ Dubai; its share is estimated by two-thirds, while Dubai stock owns one-third of the shares. Dubai Financial Services Authorities (DFSA) is responsible for organising the stock market for NASDAQ Dubai.