UAE Stock Markets
The UAE is home to 3 major stock markets, each providing different benefits to different types of investors. These exchanges are the Dubai Financial Market (DFM), Abu Dhabi Securities Market (ADX) and the Nasdaq Dubai.
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The Dubai Financial Market and Abu Dhabi Securities Market are regionally focused stock markets that don't include international listings. However, this is not to say these markets aren't sophisticated or should be ignored as they regularly produce higher volumes of trade and are the go to exchanges in the region.
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Located within the Dubai International Financial Center, the Nasdaq Dubai is not a regional market but was set up to serve as an international one and provides the most benefits to firms hoping to raise money and put down roots in the country. It provides a variety of financial instruments to utilize, including but not limited to: equities, sukuks, bonds, ETF's and derivatives. When listing an IPO the Nasdaq Dubai has very few restrictions, allowing businesses to set their own starting price and not have prices be artificially set low by an external force. The minimum market cap required to be listed is a reduced value of $10million, allowing younger companies poised for growth to take advantage of the UAE and its environment. In fact it has been said that "(The Nasdaq Dubai) is the perfect springboard for expanding to the international market, while maintaining a strong UAE and regional presence", showing the perfect mix of regional and international exposure it provides.
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It is often viewed as the international branch of the DFM as it holds 66% of the Nasdaq. This is an advantage to investors as the Nasdaq is not a small exchange out there on its own, it is linked to a more established regional market that will allow it to continue its growth. In fact Fathi Ben Grira, CEO of MENACORP(a financial services corporation that operates in the DIFC) said “Arab markets should be considered as one single market.” “The Nasdaq Dubai and the Dubai Financial Market co-brand themselves as ‘one exchange, two markets’. Meaning by entering the market on the domestic or international side allows you to share in the opportunities and advantages they each provide, in tandem.
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However, the Nasdaq Dubai has a narrow daily trading window of only 4 hours and doesn't have the volumes or depths that larger more established markets can provide. This weakness will only dissipate over time as the UAE become fully recognized and utilized as a major financial market.
