New regulations 'will help ADSM expand'

Abu Dhabi: The much-anticipated regulations on the Abu Dhabi Securities Market (ADSM) will help it become more mature and attractive internationally, said Tom Healy, ADSM's director-general.

Healy said foreign institutional investors in the UAE presently don't have access to a range of tools used globally, such as market-making, stock-borrowing and short-selling.

Emirates Securities and Commodities Authority (Esca), the financial regulator, is trying to bring local regulations in line with international standards, he said.

The new equities market regulations will be introduced this year, Esca has said.

"There is a range of tools available to the investors in the global market - stock borrowing, research advisory services by intermediaries ... We have to wait and see if that happens here," said Healy.

Healy said the idea is to help the market expand. At present there are 64 companies listed on the ADSM, besides two convertible bonds, he said. Foreigners own close to a third of the shares in ADSM companies.

"The combined market capitalisation of the companies listed on the ADSM is currently about Dh435 billion." Healy said.

He added there is speculation regarding new initial public offerings. "We have heard there are seven IPOs planned. These will, of course, depend on market conditions.

"Looking ahead, we want major overseas institutions to make investments in ADSM companies," he said, declining to elaborate.

Separately, Healy said a common GCC currency along with uniform regulatory standards will help evolve a common capital market in GCC securities, but that does not mean a single stock exchange.

"A single GCC currency and common standards of regulation will be part of the background for a common market in GCC securities," said Healy.

GCC countries have set a 2010 deadline to introduce a common currency.