15.2 Billion Dirhams of margin trading finance in ADX in 2016

Press release

Published February 5th, 2017 - 11:40 GMT

H.E. Rashed Al Blooshi - ADX CEO

Abu Dhabi Securities Exchange (ADX) announced that margin trading finances have reached 15.2 billion Dirhams, representing %15.4 of the total trading value (buy and sell) in 2016 which amounted to 98 billion Dirhams.

The increase in the value of these facilities is due to the increased number of brokerage companies that offer this service - with 33 out of all 48 brokerage companies that operate in the Exchange.

The total shares that were financed by this service reached 15.5 billion Dirhams, which reflects that the majority of liquidity were offered to small shares.

The real-estate companies traded on ADX topped the list with 10.7 billion Dirhams, or %70.3 of all funding offered by brokerage companies in ADX in 2016.

Eshraq Properties was the most active among these companies with 6.24 billion Dirhams, followed by Al-Dar with 1.94 billion Dirhams; Manazel with 1.43 billion Dirhams, and RAK Properties with 1.1 billion Dirhams.

In the banking sector, First Gulf Bank shares received 962 million Dirhams of funding, followed by National Bank of Abu Dhabi with 328 million Dirhams. Whereas in other sectors Dana Gas received 516 million Dirhams; Methaq Takaful Insurance 563 million Dirhams, while Etisalat received 353 million Dirhams of margin trading financing.

“The growth of margin trading financing to %11 in 2016 reflects the fact that the service is in constant improvement, which increased the value of trading liquidity. The margin trading finance has become a new source of income for many brokerage companies recently as it is a channel for financing instead of borrowing for many investors,” said Rashed Al Blooshi, Chief Executive of ADX.

Al Blooshi added that: “Benefiting from margin trading service is not limited to local investors, but also foreign investors – whether they are institutional or individuals. This reflects the fact that the product has deepened trades in the Exchange. ADX is always interested in diversifying its products in order to increase its competiveness,”

It is worth noting that the law regulating margin trading was issued in 2008, and enabled brokerage companies to finance a percentage of their clients’ investments against their shares or other guarantees.

Background Information

Abu Dhabi Securities Exchange

Abu Dhabi Securities Exchange (ADX) was established on 15th of November 2000 by Local Law No. (3) of 2000, the provisions of which vests the Market with a legal entity of autonomous status, independent finance and management, and gives ADX the necessary supervisory and executive powers to exercise its functions.

Moreover, ADX has the authority to establish centers and branches outside the Emirate of Abu Dhabi, and so far it has done so in Al Ain, Zayed City, Fujairah, Ras Al Khaimah and Sharjah.

ADX's board of directors is comprised of seven members nominated by Amiri Decree. The members of the board hold office for a term of three years. The first board of directors was constituted by Amiri Decree No. (8) of 2000.