Dubai: Talk about a merger between the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange is premature, sources in both exchanges told Gulf News yesterday.
DFM sources said they are unaware of any discussion that has reached such an advanced stage as to say a merger is imminent. "Theoretically, there are obvious advantages in a merger. But there are practical difficulties as the DFM is a public shareholding company that needs the approval of shareholders. Thus the talks of an imminent merger are far-fetched," said one DFM source.
"Across the world, mergers between exchanges have been driven by the possibility of higher shareholder value. In this case, such a driver is missing. Thus, if at all there is such a move, it will be government driven," a market source said.
Various high-ranking officials have said in the recent past that a merger would in the interest of both exchanges and would broaden the country's capital market. Earlier this month, Mohammad Al Shaibani, vice chairman of the Dubai Government's Supreme Fiscal Committee, said a bourse merger would be favourable.
On April 3, Sultan Bin Saeed Al Mansoori, Minister of Economy, suggested closer co-operation between the region's stock exchanges. After a meeting of GCC market regulators in Riyadh, he said: "The current situation demands from us better co-ordination, uniting our front and launching innovative initiatives at a time when many institutions and corporate entities worldwide are doubling their steps towards forming alliances and blocs, even merging together to defeat the difficulties facing them."
