Dubai: Abu Dhabi Securities Exchange (ADX) said on Sunday that margin trading finances have reached Dh15.2 billion, representing 15.4 per cent of the total trading value (buy and sell) in 2016 which amounted to Dh98 billion.
The increase in the value of these facilities is due to the increased number of brokerage companies that offer this service — with 33 out of all 48 brokerage companies that operate in the Exchange, the ADX said in an emailed statement.
The total shares that were financed by this service reached Dh15.5 billion, which reflects that the majority of liquidity were offered to small shares.
The real-estate companies traded on ADX topped the list with Dh10.7 billion, or 70.3 per cent of all funding offered by brokerage companies in ADX in 2016.
Eshraq Properties was the most active among these companies with Dh6.24 billion, followed by Al-Dar with Dh1.94 billion; Manazel with Dh1.43 billion, and Rak Properties with Dh1.1 billion.
In the banking sector, First Gulf Bank shares received Dh962 million of funding, followed by National Bank of Abu Dhabi with Dh328 million. Whereas in other sectors Dana Gas received Dh516 million; Methaq Takaful Insurance Dh563 million, while Etisalat received Dh353 million of margin trading financing.
“The growth of margin trading financing to 11 per cent in 2016 reflects the fact that the service is in constant improvement, which increased the value of trading liquidity. The margin trading finance has become a new source of income for many brokerage companies recently as it is a channel for financing instead of borrowing for many investors,” Rashid Al Balushi, Chief Executive of ADX said in a statement.
“Benefiting from margin trading service is not limited to local investors, but also foreign investors — whether they are institutional or individuals. This reflects the fact that the product has deepened trades in the Exchange. ADX is always interested in diversifying its products in order to increase its competitiveness,” Al Balushi added.
