ADX signs custody agreement with Standard Chartered

Abu Dhabi: The Abu Dhabi Securities Exchange (ADX) and Standard Chartered Plc signed a custody agreement yesterday aimed at facilitating further international investment in Abu Dhabi and broaden the exchange's international investor base.

This is the third such agreement signed by ADX. The other two are with the National Bank of Abu Dhabi and HSBC.

"We were approached by Standard Chartered some months ago. We believe the custody agreement will raise ADX's profile internationally and create goodwill and awareness about our market at a time when the regional markets are performing better than the international markets," Tom Healy, chief executive of ADX, told Gulf News.

"The domestic economy is booming in the UAE and the listed companies are part of the local economy," said Healy.

He said currently only 13 per cent of listed ADX stock is owned by foreign investors, of which nine per cent is owned by non-GCC nationals.

Step forward

"Custody agreements such as these are an important step in developing Abu Dhabi's capital market, and we expect that number to increase. As more companies list and Abu Dhabi's dynamic economy continues to grow, more international investors will turn to our market," Healy said.

A custodian is an integral part of the chain of intermediaries that constitute the investment for foreign institutional investors. While the execution of trade takes place through brokers, a custodian performs key functions such as opening cash and securities accounts, settlement of trades, collection of dividends and safeguarding clients' assets, apart from management reporting and reconciliations. A custodian does not provide investment advice but helps in explaining the operational nuances to clients.

The ADX has 65 listed companies with a market capitalisation of $134 billion as of the end of June 2008.

In 2007, the average daily trading volume on the exchange increased by more than 400 per cent with a substantial increase in foreign net investments.

Inauguration: New facility opened

Standard Chartered Bank opened a state-of-the-art Financial Centre in Abu Dhabi late on Tuesday. The new facility has a dedicated Saadiq Islamic banking centre, priority banking centre, and an SME team, all located under one roof in Khalidiya, on Zayed the First Street. It will soon open for night banking till 8pm.

"The new branch is part of a dynamic expansion plan the bank has embarked on to increase its distribution footprint in convenient locations, and to bring modern lifestyle banking to its increasing customer base," Standard Chartered said.

The branch was inaugurated by Shaikh Nahyan Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, along with Gareth Bullock, Standard Chartered Bank's group executive director for Africa, Middle East, Europe and the Americas.