By: Mahmoud Gamal
Abu Dhabi – Mubasher: The Abu Dhabi Securities Exchange (ADX) on Tuesday will start providing technical short Selling services to enhance liquidity and attract more foreign investors.
In the meantime, earlier on Tuesday Al Safwa Mubasher announced starting technical short selling, to be the first company that applies it.
Technical short selling is the sale of securities which are not owned by the sellers, but it must be provided during the settlement period T+2, and it aims to achieve profits through the prices’ variation, in case of prices' decrease.
Alsafwa Mubasher tries to provide the most updated services to customers, and technical short selling will enhance the company’s services, the CEO, Ehab Rashad said.
Alsafwa Mubasher started providing technical short selling through online trading that will allow customers to sign agreements and start trading.
ADX to increase liquidity
The ADX tries to diversify the investment and hedging tools, aiming to raise liquidity, analysts told Mubasher.
Technical short selling will enhance long-term investments, and will reduce speculations, the CEO of MindCraft Consultants Fadi ElGhattis said.
The technical short selling is used to improve the stock markets efficiency through knowing the best prices of buying and selling, and to secure the largest amount of liquidity, ElGhattis added.
ElGhattis noted that technical short selling will contribute into not raising prices above their fair value (FV) or creating economic bubbles.
Technical short selling will reveal manipulations of companies’ financial results if occured, the CEO of MindCraft Consultants noted.
One of most positive tools of technical short selling is raising liquidity, ElGhattis stated.
ADX eyes more investors
After the ADX starts technical short selling, it is forecasted that investors will test before using it regularly, Analyst in Menacorp, Issam Kassabieh said.
After starting technical short selling the UAE bourses must attract more investors on long-term, Kassabieh added.
The UAE stock markets are the first bourses in the GCC nations that started technical short selling.
The regulatory authorities of the UAE try to upgrade the country’s stock markets , and technical short selling is one of services that will help in upgrading their bourses.
Translated by: Mohamed Hesham Azab
