x Abu Dhabi, UAESaturday 20 January 2018

Optimism emerging in UAE on market upgrade

Optimism is growing that the UAE will be upgraded by the MSCI to emerging markets status.

The country's stock exchange regulator is "optimistic" about an upgrade by index bench-marker MSCI, said Abdullah al Turaifi, the chief executive of the Securities and Commodities Authority.

"We have fulfilled all the main requirements made by Morgan Stanley and now we can only wait and see," Mr al Turaifi said.

The UAE is considered a frontier market. MSCI will make a decision on June 21 whether to upgrade the country to emerging markets status, a move that is expected to bring billions of dollars of liquidity to the local exchanges.

The stock exchanges, Abu Dhabi Securities Exchange and the Dubai Financial Market, said on May 29 market participants are now ready to use an upgraded trading system, a criteria made by MSCI. As of last week, members and custodians can execute trades based on the delivery versus payment system.

DvP is a securities industry procedure in which payment for a security must be made when the security is delivered. Usually, the payment is made to a bank, which in turn pays for the security. MSCI will revalue the bourses' current frontier market status by examining, among other measures, economic development, trading volumes and market accessibility.