Abu Dhabi Securities Exchange (ADX) is poised for future growth boosted by the robust economic growth rates in Abu Dhabi, senior exchange officials stated today.
By the end of 2009, the general index recorded 15 per cent of gains for the year; lifting the market capitalization of the listed securities up by 16.5 per cent to AED 294.57 billion (US$ 80 billion).
“The economic strength of Abu Dhabi will eventually prevail and will be reflected in the Emirate’s equities market which is poised for future growth,” commented Tom Healy, ADX’s Chief Executive.
“In five years, Abu Dhabi’s Gross Domestic Product (GDP) soared by 328 per cent from AED 218 billion (US$ 59.4 billion) in 2004 to AED 934 billion (US$ 254.4 billion) by the end of 2008, and such impressive growth rate reflects the accelerating economic development of Abu Dhabi,” he added.
Robust economic growth combined with relatively undervalued equities P/Es will eventually attract more investors who seek to compensate for the losses incurred during the recent international financial crisis according to Rashed Al Baloushi, the Exchange’s Deputy Chief Executive.
In terms of market capitalization, the market value of the listed equities increased by 16.5 per cent to AED 294.57 billion (US$ 80 billion) with Emirates Telecommunications (Etisalat) maintaining its position on top of the list at AED 79 billion (US$ 21.5 billion) in market value, followed by the National Bank of Abu Dhabi (NBAD) and First Gulf Bank, accounting for AED 26.9 billion (US$ 7.3 billion) and AED 22 billion (US$ 6 billion) respectively.
The contribution of institutional investors in market transactions continued to grow, with the value of demated shares held by this investor category at AED 66.4 billion by the end of 2009, accounting for 26.6 per cent of the total value of demated shares.
The net trading position of foreigners remained positive in 2009 standing at AED 1.22 billion, with the United Kingdom maintaining its leading position, accounting for about 21 per cent of the total foreign trading at ADX. As regards to the Gulf Cooperation Council; Qatar ranked the first with a share of 13% of the total, followed by Kuwait and Saudi Arabia accounting for 13%, 11% and 8% of the total, respectively.
The real estate sector remained the most active during 2009 accounting for more than 50% of the total value of traded shares during the year, followed by the energy and banking sector accounting for 19% and 14.6% respectively.
Two new listings took place during the year with Green Crescent Insurance and Gulf Live Stock, lifting the number of listings to 67 companies.
In terms of the Exchange’s infrastructure, ADX ranked second among Abu Dhabi Government entities in terms of automation of workflow through the application of e-services, as an ambitious project for a new internal network was accomplished for the purpose of establishing a more efficient workflow, while other new services were introduced online, such as submitting investor complaints through the website and the automation of disclosures, in addition to improved online company financial reporting facilities.
During the year, ADX co-hosted an Abu Dhabi Investment Forum in London and hosted the annual general meeting of the South Asian Federation of Exchanges, in addition to the signature of various agreements and memorandums of understanding with parties like Microsoft, Abu Dhabi Center for Corporate Governance and the Telecommunications Regulatory Authority.
Towards the end of 2009, ADX issued an E-questionnaire to assess investment knowledge and understanding, and the results of the survey were used to derive ADX Investor Literacy and Market Sentiment Indices. Nearly 1700 investors participated and a massive 94% completed the survey. This is the first stage of a long term strategy to address investor literacy in tandem with the Abu Dhabi Economic Vision 2030 which sets out concrete steps for economic and societal development. The survey results which establish the Investment Literacy Index and Market Sentiment Index will form the basis for directing ADX’s market awareness and education programs.
As part of an expanded stakeholder communications strategy, ADX developed and issued separate satisfaction surveys for its direct market users, i.e. brokers, listed companies, custodians and registrars as well as a separate survey for investors. The surveys aimed at assessing market structure, market maturity and market sentiment, and at the same time posed questions with regard to satisfaction levels.