29 September 2005
DUBAI -- Transparency is key to maintaining investor confidence in the UAE's stock market, said Abdullah Salem Al Turaifi, Executive Director of Emirates Securities and Commodities Authority (ESCA) yesterday.
Speaking to a group of senior bankers at the Bankers' Lunch organised by Sulaiman Mazroui, Chief Manager, Group Affairs, Emirates Bank, Turaifi said all participants in stock market including bankers, brokers, investment bankers, merchant bankers, companies and the stock exchanges should work towards maximum transparency to keep the investors confident in the stock market.
SCA, the regulatory authority, responsible for the overall regulation and supervision of securities and commodities markets in the United Arab Emirates is actively involved in investor education and promotion of corporate governance.
The market watchdog recently signed an agreement with London Stock Exchange to benchmark the performance of the UAE stock market.
"While the mature markets around the world have more than 150 to 200 years history behind them, we are very young but are striving to be the best in the world in the shortest time frame. We are willing to learn from the experiences of others," he said.
The UAE stock market, though very young, has made tremendous progress during the past five years. From 27 companies in 2000, across the two bourses, the market currently has more than 80 listed companies. While the market reported a cumulative turnover of Dh47 billion last year, in the first three quaters of this year the turnover is close to Dh100 billion.
From a modest market capitalisation of $12.70 billion in 2001, the market today has a market cap of over $224.7 billion.
Speaking about the expansion of UAE stock market, Turaifi said the banks operating the UAE have a big role to play in bringing more initial public offerings. "Banks should work more proactively with companies to bring them to the market through their vast research resources, and advisory and investment banking relations with companies."
The IPO market in the United Arab Emirates according to Turaifi is dominated by a few sectors such as real estate and oil & gas, and there should be a conscious efforts by banks to encourage more companies in other sectors to go public, he said.
Answering questions on the DIB share manipulation probe Turaifi said the individuals involved in the case has been referred to the public prosecution.
Affirming that, SCA's role is market regulation and supervision, he said it is the responsibility the stock exchanges to monitor the activities of investors and other market intermediaries on the market.BY BABU DAS AUGUSTINE
© Khaleej Times 2005
