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UAE set to allow foreign ownership in some areas

Talking to media, at his office, he denied that foreign ownership rules are obstacle, to the winning the Emerging Market status on MSCI Index from the Frontier Market status, which the nation already have attained.

“We are waiting for their review, in June, this year, as we’ve fulfilled all their (MSCI) requirements,” the chief executive said.

Commenting on the 2011, Al Turifi termed it “good year” for the country, as strong economic indicators created bullish sentiments.

The economy, he said was expected “to grow by 3.5 per cent, in 2011 while for this year the growth will further climb to 4 per cent,” according to the Ministry of Economy. The country was singled out in many areas for its best business doing environment and making investments in the region and even on international level, which led to rise in business activities in the year, Al Turifi said. The government’s announcements to go ahead with its mega infrastructure projects in the current year has also had a positive impact on the business confidence in the country, even though elsewhere in the world debt situation is a cause of concern, he viewed.

The chief executive said that positive indicators have boosted the share trading volume to 500 million a day in the year so far, which is expected to rise to 1 billion, within this year.

To a question, about the trading that took place in the securities of blue-chip construction giant Arabtec, a senior SCA official said it is “closely watching all trading transactions on the securities markets, as it is part of its mission to entrench the principle of sound transactions on the markets in a way that would protect all investors.”

The SCA, in the event of detecting any trading malpractices, swiftly takes the necessary legal actions to serve as a deterrent against its reoccurrence.“To confirm strongly whether a violation had occurred or not, the SCA first engages in thorough study of all the elements and aspects of the case before concluding, if the violation had occurred or not. If it had occurred the SCA takes the administrative or punitive action it deems necessary by informing the public prosecutor’s office. If not, the SCA then files the case for the record,” a top official explained. 


haseeb@khaleejtimes.com

NEW SECURITY WARRANT SOON

ABU DHABI - Warrant will be the new security, which the UAE is studying to allow on its stock exchanges, in order to expand their product-base.

Other measures being studied include rules to allow issuance of Mutual Funds, Book Makers, Liquidity Provider, along with short-selling.

These measures, which are expected to be completed within the year, are designed to boost the shares and securities activities, a top official said.

Warrant is an instrument, which allows holder to purchase from the issuing company, the underlying share at a fixed price. It is usually attached to bonds or a preferred stock, as a sweetener, allowing the issuer to pay lower interest rate or dividends.

Last year Stocks and Commodities Authority said it is studying to launch several initiatives that will broaden the markets and would be helpful in improving the much needed liquidity. The authority has drafted the rules on setting up a mutual funds industry, which will allow their establishment locally and promotion of a foreign-based fund in the country. The rules are expected to be out by the mid of this year, a top official said. There is already one local mutual fund issued by Abu Dhabi’s National Bank of Abu Dhabi, which was being regulated, under the rules governed by Central Bank of the UAE. “Now, ESCA has taken over the responsibility of the mutual funds’ regulation, so it is introducing a set of new comprehensive regulations to regulate it effectively,” a senior ESCA official explained.

“The stock market regulator approved and allowed to be issued three mutual funds, last year, though trading in them is thin,” the official said.

These funds were issued Al Hilal Bank, Al Mal Capital and Abu Dhabi Islamic Bank.

The Authority also approved 130-foreign domiciled mutual funds to raise money in the country. Ibrahim Al Zaabi, deputy chief executive said that rules on Book Makers, Liquidity Providers, short-selling would be put in place during the year.

haseeb@khaleejtimes.com