The UAE has announced launching a ‘Second Market’ that will exclusively trade shares of private companies, reported The National and Arabian Business, adding that the new market is to commence operations within the next few months.
Second Market plans were approved by H. H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister and Ruler of Dubai, following a briefing by the Securities and Commodities Authority (SCA).
The market will operate on a special platform set up inside the UAE’s existing stock exchanges, Arabian Business highlighted.
Commenting on the Second Market launch, Mubasher highlighted that this is another positive step towards further developing the UAE's capital markets.
“We believe the "second market" will act as a platform for private (mostly family-owned) firms to test the waters before making their milestone decision to go public through an initial public offering (IPO). In other words, the second market will groom more companies into becoming publicly listed which will eventually enrich the UAE capital markets’ breadth,” Mubasher stated, indicating that the UAE's market capitalisation is currently less than 60% of nominal gross domestic product (GDP) versus an average of over 80% for other Asian markets.
"The launching of the second market, which is solely for trading of shares of private companies, is part of the SCA’s comprehensive strategy aimed at achieving leadership in developing the financial markets and in contributing to the development of the national economy according to the best international standards and practices," the Dubai Ruler stated.
The second market should see the trading of as many as 135 firms over the next few months on the new platform, The National quoted SCA as saying, adding that SCA Chairman and Minister of the Economy Sultan bin Saeed Al Mansouri had highlighted that the move could spark similar developments across the Gulf Cooperation Council (GCC) and other Arab countries.
SCA said it examined a number of advanced international markets in Europe and the United States before finalising its plan for the Second Market, Arabian Business added, noting that a committee, consisting of SCA, the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM), was set up to coordinate efforts to draft a regulation for a second market in collaboration with a consultancy firm.
Second Market plans were approved by H. H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister and Ruler of Dubai, following a briefing by the Securities and Commodities Authority (SCA).
The market will operate on a special platform set up inside the UAE’s existing stock exchanges, Arabian Business highlighted.
Commenting on the Second Market launch, Mubasher highlighted that this is another positive step towards further developing the UAE's capital markets.
“We believe the "second market" will act as a platform for private (mostly family-owned) firms to test the waters before making their milestone decision to go public through an initial public offering (IPO). In other words, the second market will groom more companies into becoming publicly listed which will eventually enrich the UAE capital markets’ breadth,” Mubasher stated, indicating that the UAE's market capitalisation is currently less than 60% of nominal gross domestic product (GDP) versus an average of over 80% for other Asian markets.
"The launching of the second market, which is solely for trading of shares of private companies, is part of the SCA’s comprehensive strategy aimed at achieving leadership in developing the financial markets and in contributing to the development of the national economy according to the best international standards and practices," the Dubai Ruler stated.
The second market should see the trading of as many as 135 firms over the next few months on the new platform, The National quoted SCA as saying, adding that SCA Chairman and Minister of the Economy Sultan bin Saeed Al Mansouri had highlighted that the move could spark similar developments across the Gulf Cooperation Council (GCC) and other Arab countries.
SCA said it examined a number of advanced international markets in Europe and the United States before finalising its plan for the Second Market, Arabian Business added, noting that a committee, consisting of SCA, the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM), was set up to coordinate efforts to draft a regulation for a second market in collaboration with a consultancy firm.
Source:
Mubasher Exclusive
