UAE second market trading expected to boost liquidity
INVESTORS CAN BUY AND SELL SHARES OF PRIVATE COMPANIES DEPENDING ON FUNDAMENTALS
The UAE started trading in the second market yesterday, a move that could boost liquidity for private companies and pave the way for its IPO in the primary market. The second market will be a market segment within the existing infrastructure of the securities market to list private companies. Investors will be able to buy and sell shares of private companies depending on fundamentals like supply, demand, financial statements and other disclosures.
Sultan Bin Saeed Al Mansouri, Minister of Economy, rang the bell along with Eisa Kazim, chairman of the Dubai Financial Market and others, inaugurating the second markets at a capital markets conference in Dubai.
“We are starting trading of second markets in Dubai and Abu Dhabi with the listing of two companies,” said Al Mansouri.
Encourage listing
Trades started on Manazel Real Estate and The National Investor, an investment advisory firm on the Abu Dhabi Securities Market.
The capital markets regulator is reviewing applications of a number of private companies and expects to have five companies listed in the second part of next year.
“We are expecting to have a good market. This market will accommodate small and medium companies not only from the UAE but also from the region. For the time being we have two companies listed today. We are expecting to have more companies hopefully by next year. We are reviewing applications of some companies and hopefully they will be ready by next year ,” said Abdullah Salim Al Turaifi, chief officer at Emirates and Commodities executive Securities Authority.
“This is a new experience for us in the second market, but this will be a good opportunity for companies to see and practise the rules and regulations. Rules on this market are more or less more flexible compared to the public companies. We would like to see from those listed in the second market their transparency, disclosures, financial statements. Hopefully by the second part of next year, we will see at least five companies to be listed between the two markets,” he said.
“The reason to have this market is to encourage the listing or to bring them to the platform where they can have disclosures, transparency and a lot of shareholders will get more information now. I’m sure they will be happy now as they will get more information,” he said.
“I’m expecting about three to four companies to list on both Dubai and Abu Dhabi by the second half of the year,” said Al Turaifi.