Dubai Bourses' Link-Up Bears Fruit
Monday, March 28, 2011

The value of shares traded on NASDAQ Dubai reached USD71m in February 2011, up 50% from USD47.1m in January as the bourse's recent switch to the Dubai Financial Market's trading platform boosted volumes.

The share of trading by retail investors in February 2011 reached 5.5% of total traded value, while institutional investors accounted for 94.5%. The retail share rose from 2% of total traded value in August 2010, which was the first full month of trading after NASDAQ Dubai started routing all its equities trades through the trading platform of Dubai Financial Market (DFM) in mid-July. Traded value in February 2010 was USD133.4m.

The value of retail trades on NASDAQ Dubai rose from USD1.6m in August 2010 to USD3.9m in February 2011. The retail share in January 2011 was 13%, with a value of USD6m.

Jeff Singer, Chief Executive of NASDAQ Dubai, said: "In a challenging period for Middle East capital markets, the increase in retail trading in 2011 from last year indicates that the switch to DFM's platform has succeeded in attracting more retail investors to NASDAQ Dubai's market. We look forward to building further retail and institutional liquidity."

Seven regional brokers became Members of NASDAQ Dubai in 2010 to take advantage of the new trading regime, bringing the total number of Members to 35 international and regional brokers.

All equities listed on NASDAQ Dubai have been routed through the DFM's trading platform since July 11, 2010, following a landmark agreement between the two exchanges. Clearing, settlement and custody functions for NASDAQ Dubai equities also migrated to DFM's systems, under an outsourcing structure which is designed to substantially increase liquidity on NASDAQ Dubai in due course.

"This new structure brings together more than half a million individual investors on DFM with NASDAQ Dubai's institutional investors, many of them based outside the region. It positions Dubai as a leading international capital markets hub, providing investors with excellent liquidity and issuers with a choice of regulatory frameworks," Singer said at the time.

NASDAQ Dubai remains a separate exchange regulated to international standards by Dubai Financial Services Authority, which gave approval for the outsourcing. DFM is regulated by the UAE's Securities and Commodities Authority.

In May 2010 DFM acquired two thirds of the shares of NASDAQ Dubai through an acquisition of shares from Borse Dubai and NASDAQ OMX, the international exchange group.

NASDAQ Dubai remains a separate company inside the Dubai International Financial Centre. It retains its own legal framework, listing rules and Members.

Under the outsourcing, NASDAQ Dubai's equities remain listed on NASDAQ Dubai and are not listed on DFM. Trading of equity derivatives continues to take place on NASDAQ Dubai's own trading platform and systems.