Plan for new Dubai stock market

Dubai: Dubai has plans to set up a tier two stock market aimed at listing small- and medium-sized companies that wish to list and trade a relatively small portion of their capital, said an official from the Dubai International Financial Centre (DIFC).

"There is a huge opportunity for setting up a tier 2 market to accommodate small and medium sized enterprises run by families and hundreds of well-run free zone entities operating within the UAE and across the region," said Dr Nasser Saidi, Chief Economist of DIFC.

The new market, an initiative by the DIFC, will function as an alternate market similar to the AIM (The Alternate Investment Market) in London that allows smaller companies to float their shares by lowering the regulatory threshold in comparison to a main market.

DIFC expects to replicate a similar success achieved by the AIM. Since its launch in 1995, over 3,000 companies from across the globe have listed on the AIM.

"The new market will be a platform for companies from across the region. We expect such a market to give a significant boost to the private equity industry in the region which needs a viable exit route," Dr Saidi told reporters on the sidelines event organised to release the fourth annual Private Equity & Venture Capital in the Middle East report.

Time frame

Saidi said it was too early to say where the market would be established, under which regulation it would operate and whether it would span different countries in the Gulf. However, he said it is a different initiative from Nadaq Dubai or Dubai Financial Market (DFM).

DFM has been keen on listing small and medium enterprises, its chief executive Eisa Kazim told Gulf News in a recent interview. "We are in contact with many of them. Clearly the interest is there and majority of them have indicated that sometime they will seriously consider going public," he said.

"We are talking to a number of parties, gauging interest from companies. There is the issue of market infrastructure, the issue of regulation, we're addressing all of these, it is a work in progress," said Saidi, who declined to give a time frame for the initiative.

It is not clear if the new market will function as an independent bourse or will work as part of one of the existing exchanges.

The new initiative for a tier 2 market comes at a time when there have been calls to merge the country's two domestic stock exchanges, Abu Dhabi Stock Market and Dubai Financial Market. In a recent move, DFM and Nasdaq Dubai, the international stock exchange operating from DIFC integrated their trading and settlements to a single platform.

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