Only one bell will ring at the start of trade in Dubai this morning as investors buy and sell shares from a single platform for the first time, ending the separate existence of the emirate's two bourses. Stock pickers hoping for a sudden surge in trading volumes to lift the markets from their malaise may be disappointed but the consolidation of the Dubai Financial Market (DFM) and NASDAQ Dubai should at least help the international visibility of local publicly traded companies, analysts say.
It will also usher in some changes to the way NASDAQ Dubai shares are distributed to investors. Before the bourses came together, brokers who were registered to trade on NASDAQ allocated the shares to individual clients. Now investors will be allocated shares directly, limiting the role of the broker in the process. Investors will be given a national investor number that will allow them to access their individual trading accounts.That will pave the way for the full separation of trading and custodial accounts held by brokers; one of the key reasons cited by the index provider MSCI for failing to upgrade the UAE's exchanges to "emerging markets".
Such a classification could have helped to boost trading volumes from foreign and institutional investors. "This confirms the UAE is making active progress to fulfil the requirements of the MSCI. It is proof they are moving towards that direction," said Saad al Chalabi, an institutional trader at AlRamz Securities in Abu Dhabi. The migration of the stocks on both exchanges to the one platform occurred at the end of last week.
NASDAQ Dubai will continue to charge a subscription fee for live data, but 15-minute delayed quotes will now be available on the NASDAQ Dubai website and the DFM. The Dubai Financial Services Authority gave the final approval on Thursday to outsource the trading, clearing, settlement and custody functions for equities. Outsourcing of trades and other services will start today. halsayegh@thenational.ae
