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ADX-listed Invest Bank, Al Ramz Capital ink liquidity provision deal

ADX-listed Invest Bank, Al Ramz Capital ink liquidity provision deal
The signing ceremony was hosted by the Abu Dhabi bourse.
Invest Bank
INVESTB
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Abu Dhabi - Mubasher: Sharjah's Invest Bank and Al Ramz Capital on Monday signed a liquidity provision agreement under which Al Ramz Capital has been appointed as a Liquidity Provider (LP) for Invest Bank’s shares listed on the Abu Dhabi Securities Exchange (ADX).

Al Ramz Capital is a subsidiary of Al-Ramz Corporation Investments and Developments.

“The liquidity provision agreement is the first of its kind to be registered with ADX,” a statement by the bourse showed.

A Liquidity Provider, which is independent of the company and has complete autonomy over trading, is appointed by a company in order to enhance the liquidity of the underlying shares and boost the frequency of transactions.

"The LP will transact within pre-defined parameters that are agreed with the company. Some of the potential benefits to the issuer are an increase in price stability, lower trading costs, a reduction in the bid/offer spread and the potential to increase the valuation metrics," ADX's statement said.

The LP will be in charge of setting the optimal liquidity level of Invest Bank's shares, given the market price and underlying supply and demand observed, while also maintaining a tight spread between bids and offers which will provide investors with optimal entry and exit price levels in a bid to better manage their portfolios.

The signing ceremony was hosted by the Abu Dhabi bourse.

The ADX has recently kicked off a raft of services, topped by ‘Technical Short Selling’ which makes the ADX the region’s first market to launch such a service to meet the disclosure and transparency requirements.