Need of the hour is integration of UAE bourses

The project which aims at introducing single investor code between the Abu Dhabi Securities Market and the Dubai Financial Market and being implemented by the UAE Securities and Commodities Authority is an extremely important step in accelerating performance of the two markets, on both administrative and financial levels.

Currently, thousands of UAE nationals and residents own an investor code deal with the Abu Dhabi market but are unable to deal with Dubai's market, and vice versa.

The reason is that they are unable to open accounts in both markets due to technical and geographic reasons, related to their residential or job location.

The potential increase in investors in both markets after unifying the investor code is one of the positive results of this project. It will also lead to an increasing interest by investors in different company stocks in the two markets, especially leading stocks which will eventually lead to an increase of liquidity pumped in local financial markets.

Integration

Additionally, this will practically lead to finding a form of integration between the two markets, it will also ease up the work of brokers and traders, and expedite financial transfers, without utilising additional steps. All this will match methods in the most dynamic economic sectors, utilising the existing advanced technology in both markets.

The importance of this step is also seen in the additional procedures which can be added in the future. The great success expected will encourage taking other integral steps which will further attract more local and foreign investors in the UAE financial markets.

Initial Public Offerings (IPO) are expected to increase over the coming years. Currently, an investor offers all his papers and required documents whether he owns an investor's number in the stock market or not. In the future, an investor may only produce a card in any transaction of initial underwriting, as all the required data is written in the investor's card in one of the two financial markets.

An underwriter who does not own an investor code in either of the two markets has to submit all required documents, after which he will be granted an investor code. This step will ease the initial underwriting operation and decrease the underwriting costs, especially if the internet can be used for underwriting by using the investor code and accompanied money transfers.

Upgrade

The UAE which is considered on top of the Arab countries list of internet users, and due to its advance in this area, it has the ability to upgrade the initial underwriting procedures.

Another future step which may actively participate in developing local financial markets is to merge dealing monitors, and giving dealers a chance to view price changes to take investment decisions swiftly, as required in financial markets.

Economic and financial developments will help the UAE's economic growth rates.

The growing role of financial markets and listed companies in several important sectors, such as banking, industrial and services is effective in the economic and social development process.

The integration of the two financial markets by connecting their procedures to advanced technologies will enable them to keep up with the swift local economic growth.

This will result in attracting additional investments, and lead to strengthening the local financial market's development role.

The writer is a UAE economic expert.