Stock exchange set up in the UAE for the first time
United Arab Emirates, Economics, 9/27/1997
The National Bank of Dubai stated that the official stock exchange is expected to begin operation by the end of next year or the beginning of 1999.
In its monthly economic report, the bank called for more clarity in the dealings of stock exchanges. It specified the requirements needed to set up an official stock exchange market in the UAE which is the only Gulf country that does not have a stock exchange market.
The requirements include the prompt availability of share prices on computers, laying down the official rules for dealings, which prohibits use of credit and prevents tampering with share prices, in addition to providing a suitable physical location for dealers.
The bank stated that the UAE's efforts to establish a stock exchange dates back to 1982 and that a committee was founded in 1994 for this purpose which resulted in a draft proposal containing the procedures needed to set up the stock exchange market and its laws. The proposal was submitted to the authorities to take the necessary steps for its implementation and to legislate its laws which are expected to be ready by the end of 1998 or at the beginning of 1999.
The report mentioned that the shares are circulated now through brokers who are permitted by the Central Bank, but the dealings are very weak and a small number of investors get most of the circulated stocks.
Financial analysts stated that the differences over the Central Bank's suggestion to set up an inspection authority that supervise the stock exchange market would encumber the establishment of the market. They mentioned that other factors under study include market regulations, the foreign participation rate, the stock exchange's location whether to be in the capital or in Dubai, which is the financial center.
The report pointed out that a wave of issuing stocks is expected in autumn 1997 and a new wave of general liquefaction of the companies owned by the families makes the need to set up a stock exchange market greater. The market value of the circulated stocks are 60 billion dirhams ($ 16 billion).
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