x Abu Dhabi, UAESunday 21 January 2018

DFM to own all of NASDAQ Dubai

The final payment of Dh148m will be made through Borse Dubai.

Dubai Financial Market expects to own 100 per cent of NASDAQ Dubai by the end of the year.
Dubai Financial Market expects to own 100 per cent of NASDAQ Dubai by the end of the year.

Dubai Financial Market (DFM) expects to own 100 per cent of NASDAQ Dubai, the emirate's other exchange, by the end of the year.

DFM, the Arab world's only publicly listed stock exchange, acquired 67 per cent of NASDAQ Dubai through a cash and share payment in May.

The two bourses consolidated in June after NASDAQ Dubai outsourced its trading, clearing and settling activities to DFM. NASDAQ Dubai stocks also now trade on the DFM platform.

The final payment of Dh148 million (US$40.2m) to acquire the remaining 5 million shares of NASDAQ Dubai will be made through DFM's biggest shareholder, Borse Dubai, according to a regulatory disclosure lodged yesterday.

"After completing the third completion, NASDAQ Dubai will be 100 per cent owned by the DFM," the statement said.

The DFM posted its first loss in two years after the consolidation. The company reported a third-quarter loss on Sunday of Dh2.9m, down from a profit of Dh71.5m in that period last year.

Because the DFM now has a controlling stake in NASDAQ Dubai, it has to include any profits and losses from that bourse into its own balance sheet. Without those, DFM would have posted a profit of Dh3.8m.

Shares of DFM continued to drop yesterday, by almost 7 per cent to Dh1.53 a share, after falling 3.5 per cent the day before.

Not including the consolidation, the DFM's trading commission fees dropped to Dh21.7m from Dh83.7m in the third quarter last year, but analysts said the figures reflected the last effects of the low volumes that afflicted local markets throughout much of the year.

"The outlook is that the coming years will see better volumes," said Saad al Chalabi, an institutional trader at AlRamz Securities in Abu Dhabi. "This year will be the floor for trading activity, which will improve as the market prepares to fulfil the requirements by benchmarker MSCI."

DFM's full ownership of NASDAQ Dubai is also a positive move in that it strengthens DFM's position in the event of a merger with the Abu Dhabi Securities Exchange (ADX), said Mr al Chalabi.

"It's another positive sign for the company, which will give them a better footing in those negotiations," he said.

There were talks this year at the governmental level about a possible merger between the ADX and DFM, but it was not clear whether those conversations were continuing.