Monday, May 16, 2011
(This story was originally published Sunday.)
DUBAI (Zawya Dow Jones)--The stock markets of Dubai and Egypt plan to allow listed companies on both bourses dual listings of their shares in a bid to diversify investment opportunities and boost liquidity.
Both bourses, Dubai Financial Market and the Egyptian Exchange, will collaborate to set up a comprehensive framework that will pave the way for listed companies on both exchanges--specifically those with significant operations in the U.A.E. and Egypt--to dually list their shares, the Dubai bourse said in an emailed statement Sunday.
"Taking the relations between two of the major exchanges in this part of the world a step forward will further improve the liquidity and benefit both investors and companies," DFM's Managing Director and Chief Executive Officer Essa Kazim said in the statement.
"As we all know the Egyptian market is one of the main international markets for U.A.E. companies including many DFM-listed companies. Similarly, there are many Egyptian companies that have major operations in the U.A.E. Those companies are ideal for potential dual listings, and we are going to have the suitable framework to see this happening at the earliest," Kazim added. DFM already has about 20 dual listings from Kuwait, Bahrain, Oman and Sudan.
"The advantage is for DFM, but its success will depend on the approach of companies and investors to make use of such a facility," said Joice Mathew, senior manager for research at Muscat-based United Securities.
"Dubai already has dual-listing agreements with some of the regional exchanges and there are several dual listings already in place. However, the real benefits of dual listings are not very visible in terms of trading liquidity as currently experienced by these shares. Increase in arbitrage opportunities is another plus point, but forex variations would be a major determinant," Mathew said.
Dubai's bourse, which is hoping to be upgraded by MSCI to emerging market status, has a market capitalization of about $35 billion in terms of primary listings, while Egypt's market, already part of the MSCI emerging market index, has a $63.5 billion market capitalization, according to Zawya.com data.
The U.A.E.'s stock markets, along with Qatar, are likely to be reviewed by MSCI in June for a potential upgrade to emerging market status, from frontier market. Many international investors and fund managers track emerging markets closely.
-By Nikhil Lohade, Dow Jones Newswires, +9714 446 1694, nikhil.lohade@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
16-05-11 0353GMT
