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The Dubai Financial Market Image Credit: Gulf News Archives

Dubai: Dubai Financial Market Co on Sunday reported a 3.9 per cent decline in net profit and a 2.7 per cent drop in revenue for the year 2019.

The bourse’s benchmark index recorded fewer trades.

The entity posted a net profit of Dh120.6 million in the financial year ending December 31, compared to Dh125.5 million in 2018.

Total revenue slipped to Dh315.8 million from Dh324.7 million in the prior year, the firm said, but proposed a cash dividend of Dh200 million.

However, the regulator ended the year on a high note, as total revenue during the fourth quarter of 2019 increased 2 per cent to Dh74.2 million, while net profit increased 15 per cent to Dh25.1 million.

Although the DFM General Index rose 9.3 per cent during the year 2019, trading value declined 12.5 per cent to Dh53 billion. During the first six months of 2019, DFM trading value fell to Dh25 Billion, a 31.5 per cent decrease compared to the corresponding period of 2018.

There were transactions worth Dh2.82 billion from foreign investors, who acquired 49.6 per cent of market activity, with an ownership of 17.35 per cent of total market valuation.

This “underlines DFM’s attractiveness to international investments”, the bourse said.

Roots listing of family offices

The DFM said it was working to encourage family and private businesses to “avail the advantages” of the financial markets, adding that it anticipates a revival in the Initial Public Offering (IPO) sector after being in “active communications” with these companies.

The market registered 3,067 new investors in the year — lifting its investor base to 844,455 investors, which is higher than last year when it added 2,000.

The UAE Cabinet last month approved a draft law that encourages UAE citizens to engage in business activities and family-owned businesses to list on the local stock markets, a move that analysts hoped would be the start of a much-required reform in the local capital markets.

Going public has up until now remained a distant priority for most of the region’s venerable family businesses, with succession issues and corporate governance structures among more pressing concerns.

Although analysts sought further details on the law, they said the move would help boost sentiment and lead to a subsequent market reform.

“We are [also] accelerating efforts towards launching the first platform of its kind globally for share trading of free zone companies,” said chairman Essa Kazim, adding that it will “enable free zone companies representing various economic sectors to leverage the advantages of listing on DFM.”