Abu Dhabi Securities Market (ADSM) announced today that it will host its first Leadership Forum on Wednesday 7 March 2007.
The Forum, entitled ‘Exchange Traded Funds – Challenges and Opportunities’, will take place at the Emirates Palace Hotel and is the first of its kind to be held in Abu Dhabi. The event will highlight the vital role ADSM has to play in Abu Dhabi’s pioneering economic diversification programme.
Designed to promote the concept of Exchange Traded Funds (ETFs) in the UAE, the ADSM Leadership Forum will, for the first time, bring together fund managers, institutional investors, lawyers, regulators, and other experts with senior Arab and
GCC officials to debate the challenges and opportunities for the establishment of ETF’s in the UAE.
Leadership
Speaking at a news conference in Abu Dhabi to launch the Forum, Rashed Al Baloushi, Acting Director General of ADSM, explained that in the six years since the UAE exchanges were established, ADSM had shown leadership in the areas of regulation, corporate governance and education of all those who operate in Abu Dhabi’s financial market. Now it was time to show leadership in a public forum that would debate ideas that will secure the future growth of Abu Dhabi and its financial market.
“As part of Abu Dhabi’s diversification programme, ADSM has an important role to ensure the financial market is operated up to international standards of best practice and continues to evolve and meet the needs of both retail and institutional and international and national investors”, said Mr Al Baloushi.
“The ADSM Leadership Forum is an initiative designed to introduce new concepts in a public forum and in the presence of international experts”, he continued. “This will allow us all to share our knowledge and experience and ultimately find solutions to help our financial markets develop and grow.
“For some time now, ADSM has been encouraging the establishment of more collective investment schemes in the UAE. At the same time however, our rules and regulations need to evolve to meet the demands of a more mature financial market.”
Exchange Traded Funds - benefits
Mr Al Baloushi went on to explain what Exchange Traded Funds are and why ADSM had chosen ETFs as the subject for their first Leadership Forum.
“In order to continue our growth and development, ADSM needs more investment vehicles”, he said. “These will attract institutional investors and give retail investors more opportunity to diversify.
“An ETF is a form of collective investment scheme that tracks an index or market sector”, explained Mr Al Baloushi. “It is managed as a company whose objective is to achieve the same return as a particular market index or sector. In that way, it is similar to an index fund except that it is listed on a stock exchange.
“We would like to see ETF’s established in our market”, he continued. They are a cost-effective way for retail investors to diversify and therefore spread their risk. This is because an investor can access a whole portfolio of stock through just one security. We also believe Exchange Traded funds are a well suited vehicle for the maturity of our market.
“By bringing a large number of experts on the subject of ETF’s together with the GCC business community and UAE Government, we can examine how others have done it before us and agree on the appropriate mechanisms and regulatory infrastructure to introduce ETFs to our market.”
Best practices programme
Mr Al Baloushi concluded by saying that the Leadership Forum was the latest in a number of initiatives introduced by ADSM as part of its international best practices programme:
“As an exchange, we have a responsibility to maintain the highest standards of transparency and integrity in our financial markets.
“This is why we have recommended a corporate governance code for the UAE, this is why we have recommended introducing Trust and Custody laws and a code of ethics for fund managers to protect unit holders and this is why we have introduced compulsory professional training programmes for our brokers.
“All our initiatives are designed to maintain the long-term stability of our market and attract international institutions to Abu Dhabi. We would like to see Abu Dhabi become the asset management hub of the Middle East.”
Since the end of 2001 the number of listed companies traded on ADSM has grown fourfold; there are now nearly six times as many brokerage firms; the aggregate market capitalisation of companies traded on the exchange is 20 times higher; there are 50 times as many shareholders registered and ADSM is a model emiratisation employer with UAE nationals making up about 74% of staff.
For more information about the ADSM Leadership Forum please go to www.adsmleadershipforum.com.
