Abu Dhabi bourse to cut trading commissions by 50% to enhance market liquidity

The Abu Dhabi Securities Exchange (ADX) said on Saturday that it has cut its trading commissions by 50 per cent and will extend its trading hours by one hour from October 3.

The trading fees will be reduced to 0.025 per cent from 0.05 per cent from September 1, the exchange’s second commission cut this year and the third in three years, it said in a statement.

Trading hours extension

Dubai Financial Market (DFM) also announced the extension of its trading hours from four hours to five hours daily with effect from October 3, 2021 in line with directions of the Securities and Commodities Authority (SCA) and in coordination with various stakeholders.

The trading hours extension should bring ADX and DFM at par with the operating hours of many exchanges globally, the two bourses said, part of moves to bolster market activity and to deepen market liquidity. The market will be opening at 10am and closing at 3pm from October 3 onwards.

Investment opportunities

Mohamed Ali Al Shorafa Al Hammadi, Chairman of Abu Dhabi Securities Exchange, said the ADX offers unique, high-growth investment opportunities within a strongly-regulated, tax-free and stable business environment and the extension of our opening will serve to attract increased international investment.

“We are very pleased to have been able to answer the call by our investors, issuers, and intermediaries for lower trading commissions and longer trading hours, reflecting increased demand to trade Abu Dhabi’s publicly listed companies,” he said.

Saeed Hamad Al Dhaheri, chief executive officer of Abu Dhabi Securities Exchange, said the significant reduction in trading commissions and the extension of our operating hours align ADX with international practices and helps us to realise our ADX One strategy’s main aim of enhancing liquidity and increasing our market capitalisation.

“The fee cuts and extension complement our tireless efforts over the past year to bring the most sought out products and services to issuers and investors. We will continue to nurture liquidity on the exchange as we roll out the ambitious ADX One strategy announced at the beginning of the year,” he said.

The Abu Dhabi Securities Exchange General Index (ADI) has recently reached 7,700 points for the first time, supported by a series of listings and increased participation by international investors.

In addition, the index has gained 51 per cent year to date, making it one of the best performing equity indexes in the world.

Gateway to investment

Hassan Al Serkal, chief executive of the DFM said the new initiative will further strengthen the leading position of the DFM as a main gateway for investments and attract wider and more diversified categories of investors, especially the international investors who are constantly showing great interest in our market.

“The trading hours’ extension will provide investors with more flexibility and larger time span to accomplish their investment activities on the market,” he said.

The DFM has a large and diversified investor base covering 207 countries. International investors account for 48.2 per cent of its trading activities and they have maintained a noticeable and growing presence on the market over the past years with an ownership of 18.5% of the market capitalisation at the end of June 2021, additionally, foreign investors accounted for 69 per cent of new investors on DFM.

— muzaffarrizvi@khaleejtimes.com