x Abu Dhabi, UAEThursday 18 January 2018

Abu Dhabi's ADX listing plan back on track

The Abu Dhabi Securities Exchange resurrects a plan to list bonds on the capital's exchange and is looking for a company to test the waters of local markets, an exchange official says.

The Abu Dhabi Securities Exchange (ADX) has revived a plan for companies to list bonds and sukuk on the capital's stock exchange and is seeking its first issuer.

The plan, which emerged in July last year, encountered snags including the region's recent bout of political unrest, according to Rashid al Baloushi, the deputy chief executive of the ADX.

But after the completion of regulatory changes, the exchange is seeking its inaugural bond or sukuk to act as a benchmark for future issuances.

"The regulatory framework is done," Mr al Baloushi said.

"Now we have to go and convince the issuers to bring the bonds into the market."

Authorities are hoping to persuade a government-related company with a strong credit rating to issue the exchange's first bonds, Mr al Baloushi added.

Many UAEcompanies choose to list their bonds in London or elsewhere to attract international buyers.

Mubadala Development's recent US$1.5 billion (Dh5.5bn) bond was listed on the London Stock Exchange.

Mubadala is a strategic investment company owned by the Abu Dhabi Government.

Another possibility is for the UAE's sovereign bonds to be listed on the exchange.

The Federal National Council approved a law last December authorising the UAE to issue federal bonds.

"We haven't approached anybody, but there's always an option," Mr al Baloushi said, referring to sovereign bond issuances.

Any issuance under this initiative would be the first time that the ADX had listed pure fixed-income instruments. Previously, convertible bonds had been listed, but liquidity was thin.

Local banks would be enthusiastic about the possibility of corporate clients seeking to list their bonds in Abu Dhabi, according to Sameh al Qubaisi, the general manager of National Bank of Abu Dhabi's institutional and corporate coverage group.

However, he added local companies would welcome the chance to broaden their funding base beyond international institutions.

"If you're able to invest locally you can have more people involved, such as insurance companies and retail investors," Mr al Qubaisi said.