A Chinese security company is removing its shares from trading on the Nasdaq Dubai, reducing the number of stock listings on the market to 10.
China Security Surveillance and Technology is set to be the first company this year to stop trading on the Nasdaq Dubai, founded in 2005 as a local market with western-style regulations. The shares were suspended yesterday pending removal.
"Market conditions" and a planned merger with Rightmark Holdings, based in the British Virgin Islands and owned by Guoshen Tu, a wealthy Chinese businessman, were behind the decision to de-list, the company said on Friday.
The board "determined that the proposed de-listing and suspension of listing were in the best interests of the company and its stockholders",it said.
The security firm's shares have traded only three times since it was listed in 2008. Its primary listing is on the New York Stock Exchange.
"There isn't enough available in terms of blue-chip or attractive names on the exchange, so I think in that sense they're suffering," said Haissam Arabi, the chief executive of Gulfmena Investments in Dubai.
"It needs to see companies like The Emirates Group [an aviation and tourism conglomerate] or Dubal [an aluminium producer] listing on it. That's going to create the interest and see trading volumes rise."
The Nasdaq Dubai's most prominent listings are DP World, the Dubai Government-controlled global ports operator, and Depa, an interiors construction company in Dubai. Damas, the regional jewellery giant undergoing a restructuring, is also listed there.
Despite brisk trading in DP World shares, observers say the market has so far failed to meet hopes it would become a premier exchange in the region - a safe, well-regulated market in part of the world where oversight tends to be viewed as somewhat lax.
Three companies de-listed last year and a further three de-listed in 2009. DP World, meanwhile, is planning a cross-listing in London this year.
Nasdaq Dubai's management is trying to reinvigorate business after merging operations last year with the Dubai Financial Market, the emirate's main local exchange. The aim is to bring in local listings big and small before selling itself again as a regional foothold for global companies.
Last month, the exchange said it was partnering Economic Zones World to entice companies based in Dubai's Jebel Ali Free Zone to list.
It is also intending to tailor listing rules for family-owned businesses in the region.
"Nasdaq Dubai is focused on attracting primary listings from the UAE and the region, including small and medium-sized enterprises as well as large companies," a bourse spokesman said. "We are talking to a pipeline of companies that are very interested in doing an [initial public offering] at the right time to take advantage of our market's unique features, including bookbuild valuation and floating as little as 25 per cent." China Security Surveillance and Technology was closed yesterday.