UAE financial markets poised for take off
(6/12/2018 9:10:00 AM)
The UAE’s financial markets are solid and will take off again in terms of liquidity and volume of trading due to positive indications from the government and an improvement in the economy, the chief executive of the Securities & Commodities Authority (SCA) said.
“I am optimistic because of the incentives our government have already issued. The positive effect will come in a couple of months on [our] financial markets,” said Obaid Al Za’abi, referring to the new plans announced by the government to boost the economy, which include the granting of long-term visas for investors as well as 100 per cent foreign ownership of companies.
Abu Dhabi also announced a Dh50 billion stimulus package to give an impetus to growth in the next three years. “The UAE economy is steady and growing. There is a good plan, all indications are very positive in terms of inflation, in terms of GDP [gross domestic product], [the] oil price is good and investments in infrastructure [are] going on. All macro indicators of the economy are positive,” Al Za’abi said. He also expects IPO activity to pick up by the end of this year.
‘We are getting applications frequently and in the last quarter of 2017 we got two. There is something in the pipeline but they [companies] are waiting for the right time to go ahead. They are in freeze [mode] because the volume of trading and liquidity. Once the liquidity improves, they will decide to go ahead with IPO.”
He also said they want brokerage firms to expand their services to include underwriting, promoting, arranging, advising, fund management and investment management, among others.
On credit-rating agencies, Al Za’abi said if the firms want to practise their activity onshore, they should register with the authority. We recently issued regulations on this. This is the focal point of security jurisdiction to license credit-rating agencies in terms of governance, ethics and business conduct. If they would like to do to business activity onshore, they should come and register with us. Saudi Arabia already [has] the same thing.” Most credit rating agencies are registered with the Dubai International Financial Centre (DIFC), the financial free zone, he added. Al Za’abi was speaking to reporters in Abu Dhabi on Sunday night.