Dubai's two stock exchanges have launched a joint initiative to improve capital market activity by hosting a series of events on the trading floor of the Dubai Financial Market to connect publicly listed companies with brokers and investors.
The first of these engagements will involve DP World, listed on Nasdaq Dubai and London. Company representatives will be available every day next week to meet regional brokers and retail investors.
DP World is making its key officials available, including the group chief executive Mohammed Sharaf, from Sunday, to discuss the company's equity story and respond to any queries investors may have, the world's biggest ports operator said in a statement yesterday. In 2010, DFM acquired two thirds of Nasdaq Dubai with plans to buy the remaining stake from Borse Dubai allowing the consolidation of key market operations for the two exchanges.
Under the terms of the agreement, Nasdaq Dubai would outsource its trading, clearing, settlement and custody functions for equities to DFM's systems.
The two exchanges are expected to host a number of similar initiatives over the next year in a bid to improve investor relations with Dubai's publicly listed companies.
DFM has an actual trading floor lined with booths occupied by brokerages, which would benefit companies listed on Nasdaq Dubai, a purely electronic market, said two sources familiar with the situation.
Volumes on the Dubai Financial Market quadrupled to a high of 611 million shares on January 10, compared to its six month average of 165 million shares.
Retail investors make up more than 80 per cent of trading activity on the DFM.
By contrast, trading activity on the Nasdaq Dubai struggles to achieve the same levels of liquidity for its nine listed companies.
On Wednesday, the market traded 1.4 million shares with a value of US$12.6 million (Dh46.2m).
In 2011, DP World sought a second listing on the London Stock Exchange's main market in a bid to energise trading in the port operator's shares and expose the company to a wider range of investors.
But the listing has failed to show material improvement in liquidity. On Wednesday, 231 shares of DP World traded in London.
The lack of available liquidity on the Nasdaq Dubai has forced fund managers to work much harder when taking positions in DP World to ensure their trades do not cause undue volatility in the share price.
"We find that you can get blocks and the liquidity most of the time," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi.
"But you have to coordinate it. We have to speak to people interested in selling their shares rather than relying on the market screen."
