Abu Dhabi – Mubasher: Capital market analysts have welcomed the decision by Rashed Al Baloushi, CEO of the Abu Dhabi Securities Exchange (ADX), to temporarily halt trading on any stock that retreats by more than five percent for five minutes. However, they have had several comments on the decision, which follows the noticeable unjustified selling by some traders during Sunday’s session.
The ADX has decided to issue a circular to temporarily halt trading on any stock that declines by more than five percent, Al Baloushi told Mubasher.
Commenting on the decision, Delma Company’s Trading Manager Wael Mahdi told Mubasher that the decision was a correct one, however it came too late.
The halt period is too short, he added, noting that five minutes do not give the investor enough time to think and consider a decision.
A halt period should exceed five minutes and range between 10 and 15 minutes Mahdi said, noting that the trading session extends for four hours. A longer period would allow shareholders and investors can deeply mull their stock-related decisions.
It is hard to foresee if the Dubai Financial Market (DFM) will follow a similar decision owing to the difference in management of the two stock exchanges, despite the DFM incurring more massive losses compared to the ADX, Mahdi stated.
Meanwhile, capital market analyst Wadah Taha told Mubasher in a comment, that the decision will not have a major effect, however it will calm investors in the coming period.
He said he expects the DFM to take a similar step at a later time owing to the declines pursuing that market, which is larger than the ADX and therefore should take a similar step. Taha called for the halt period to be extended to half an hour so that investors may have the time to take the right decisions for their stocks.
In a statement to Mubasher, ADX CEO Rashed Al Baloushi said the decision comes in line with decisions on global stock markets. Moreover, this decision was taken to allow investors to take the correct decisions related to their stocks, he highlighted, adding that this follows the state of panic that overcame ADX investors.
It is worth noting that the Egyptian Stock Exchange (EGX) had taken similar precautionary decisions in 2008, during the start of the global financial crisis. The decision is still being carried out on the EGX to date.
On the other hand, Think Financial Services (TFS) CEO Fadi Al Ghattis told Mubasher in his comment regarding the decision that five minutes are not enough; moreover, such a short period creates an added state of anxiety rather than relieving the decline.
The ADX general index dropped 3.36% or 158.56 points to 4209.75 points, cutting its gains this year and reaching its lowest level since early December 2013, which had stood at 4290.30 points.
Photo Credit: Arabianeye-Reuters
The ADX has decided to issue a circular to temporarily halt trading on any stock that declines by more than five percent, Al Baloushi told Mubasher.
Commenting on the decision, Delma Company’s Trading Manager Wael Mahdi told Mubasher that the decision was a correct one, however it came too late.
The halt period is too short, he added, noting that five minutes do not give the investor enough time to think and consider a decision.
A halt period should exceed five minutes and range between 10 and 15 minutes Mahdi said, noting that the trading session extends for four hours. A longer period would allow shareholders and investors can deeply mull their stock-related decisions.
It is hard to foresee if the Dubai Financial Market (DFM) will follow a similar decision owing to the difference in management of the two stock exchanges, despite the DFM incurring more massive losses compared to the ADX, Mahdi stated.
Meanwhile, capital market analyst Wadah Taha told Mubasher in a comment, that the decision will not have a major effect, however it will calm investors in the coming period.
He said he expects the DFM to take a similar step at a later time owing to the declines pursuing that market, which is larger than the ADX and therefore should take a similar step. Taha called for the halt period to be extended to half an hour so that investors may have the time to take the right decisions for their stocks.
In a statement to Mubasher, ADX CEO Rashed Al Baloushi said the decision comes in line with decisions on global stock markets. Moreover, this decision was taken to allow investors to take the correct decisions related to their stocks, he highlighted, adding that this follows the state of panic that overcame ADX investors.
It is worth noting that the Egyptian Stock Exchange (EGX) had taken similar precautionary decisions in 2008, during the start of the global financial crisis. The decision is still being carried out on the EGX to date.
On the other hand, Think Financial Services (TFS) CEO Fadi Al Ghattis told Mubasher in his comment regarding the decision that five minutes are not enough; moreover, such a short period creates an added state of anxiety rather than relieving the decline.
The ADX general index dropped 3.36% or 158.56 points to 4209.75 points, cutting its gains this year and reaching its lowest level since early December 2013, which had stood at 4290.30 points.
Photo Credit: Arabianeye-Reuters
Source:
Mubasher Exclusive
