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Abu Dhabi may delay listing of ETFs
The Abu Dhabi Exchange may delay listing exchange-traded funds until "early next year" because of market volatility, chief executive officer Tom Healy said.
- Bloomberg
- Published: 23:43 October 29, 2008
London: The Abu Dhabi Exchange may delay listing exchange-traded funds until "early next year" because of market volatility, chief executive officer Tom Healy said.
"The projects we had in mind before the crisis will be just as relevant when it eases off," Healy, the head of the emirate's only stock exchange, said in an interview in London on Wednesday. The exchange had planned to start trading the securities at the end of this year.
ETFs may provide more access to Gulf stocks to investors from outside the region, who face limits on equity ownership. Foreign investors have sold Gulf equities at a record pace as tighter credit markets spurred concern that companies won't be able to access the funds they need to grow. ETFs are baskets of shares that trade on an exchange like a stock.
Saudi Arabia, the largest Arab economy and the world's biggest oil producer, allows citizens of the six Gulf Cooperation Council states and foreigners living in the kingdom to trade stocks on its exchange. Non-resident foreigners are restricted to buying through Saudi mutual funds, and in other Gulf states most companies cap foreign ownership of shares.
Abu Dhabi's ADX General Index has declined 28 per cent in 2008, while neighbouring Dubai's DFM General Index has tumbled 51 per cent. All 48 of the developed and emerging markets tracked by New York-based MSCI Inc. have declined in 2008, with 23 losing at least half their value.
Healy said between 40 and 60 companies have expressed interest in listing stock on the Abu Dhabi Exchange in the next few years. He declined to estimate how many will actually go through with share offerings. At least 61 companies currently trade on the bourse.
Merging the exchanges in the GCC probably won't be undertaken "for awhile," Healy said.
"We should be trying to work together to create a single capital market, with a minimum amount of coordination on regulation."
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