ADX says five years of ‘tremendous’ listing demand have reshaped Abu Dhabi’s market

Abu Dhabi: Abu Dhabi has seen sustained demand from companies looking to list over the past five years, helping make its stock exchange one of the larger listing venues globally while drawing more retail and international investors into the market.

“We have seen tremendous demand over the last five years in terms of listings. So, we were among the largest listing venues in the world, and that's driven by a number of reasons, both on the supply and the demand side,” Matthias Büchler, Chief Strategy and Transformation Officer at Abu Dhabi Securities Exchange, told Gulf News.

ADX, now among the world’s top 20 stock markets by market capitalisation, houses companies worth around Dh2.9 trillion.

Büchler said Abu Dhabi’s access to capital has supported the supply side of the market, while ADX has spent recent years making it easier for retail and international investors to participate.

“Today, ADX is fully connected to all the financial centers in the world, and we have seamless onboarding and trading opportunities for all investors, and that makes it ultimately a very attractive market to come and list or to invest in,” he said.

Investor participation has continued to grow, with Büchler saying ADX has onboarded another 30,000 investors this year.

He also said 97% of the index had recovered following recent regional disruption, while 55% of listed companies had increased their share prices compared with levels before the events.

The first half of the year had already shown higher participation across the market. ADX recorded Dh171 billion in trading value by the end of June, while trading volume reached 50.3 billion shares.

Almost 3.3 million trades were completed during the six-month period, while institutions accounted for 78% of total trading value and international investors for 48%.

Foreign investors represented 77% of the new registrations during the first half.

Büchler said recent market activity has also included a highest daily traded value of Dh3.5 billion, while around Dh50 billion in dividends have been distributed this year.

Recent regional tensions tested market infrastructure across the region, but Büchler said the exchange had spent several years strengthening its systems before the disruption occurred.

ADX updated its technology stack, adopted global market standards and separated parts of its post-trade business into a separate legal entity.

Shorter-term market mechanisms were also introduced during the crisis to address volatility.

The exchange had previously completed a core platform upgrade and established AD Clear and AD CSD as separate subsidiaries, while introducing hybrid cloud capabilities and measures including revised circuit breaker floors and updated short-selling protocols.

The next phase of ADX’s strategy remains centred on increasing liquidity by expanding the number of companies and products available to investors while widening the pool of people trading on the exchange.

“When you talk liquidity in the stock exchange world, it pretty much means that you have more listings and more products, so people can choose a vast array of what they want to invest in,” Büchler said.

Investor diversity is another part of that push, including greater participation from retail and international investors.

ADX has also been expanding links with overseas markets and institutions. HSBC became its first foreign General Clearing Member, while Morgan Stanley joined as its first international remote trading participant.

The exchange added four listings during the first half, including two dual-listed exchange-traded funds from the New York Stock Exchange.

Digital infrastructure is becoming another area of focus for the exchange.

Büchler said ADX launched a sandbox with DFNS on September 20 to begin developing tokenisation and digital wallet capabilities in Abu Dhabi.

“It’s a first step in a very exciting journey to future-proof the capital market,” he said.

The exchange has also made its market data available through an AI-enabled MCP, allowing investors with their own models to consume ADX data in an AI-ready format.

Büchler said the objective is to make it easier for investors to access information and take informed decisions.

“What is important is that people can make informed decisions, and we as ADX play a vital role in this by providing data to all customers that they can make these informed decisions,” he said.

ADX’s strategy for the coming years remains focused on adding listings and investment products, broadening its investor base and maintaining market infrastructure that international participants can use with the familiarity they expect from major global exchanges.

Büchler said that work will also include attracting further companies to Abu Dhabi.

“We hope to have many more IPOs to come from the Abu Dhabi ecosystem and also elsewhere. So that's a continuation of deepening and broadening our market.”