Dubai Financial Market

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Dubai Financial Market, PJSC
DFM.gif
Founded 2000
Headquarters Dubai, United Arab Emirates
Key People Executive Chairman Essa Kazim
Products Dubai Financial Market General Index
Website http://www.dfm.co.ae/default.aspx

The Dubai Financial Exchange (DFM) is the largest financial trading exchange by turnover in the UAE, where competition is crowded. The DFM offers electronic trading focuses mainly on trading listed local securities and is majority-owned by the state-run exchange operator Borse Dubai, which recently sold DFM's counterpart Dubai International Financial Exchange -- since re-named NASDAQ Dubai.

On December 21, 2009, DFM said it planned to buy Nasdaq Dubai, its rival. The $121 million deal had been made on a commercial basis to generate cost and revenues synergies, according to its chief executive, Essa Kazim. The deal was approved by DFM’s majority shareholder, government-owned Borse Dubai, and Nasdaq OMX, which owns one-third of Nasdaq Dubai. Borse Dubai owns the remaining two-thirds.[1]

Background

The DFM was established as a public exchange in 2000 to trade domestic securities - mostly stocks but also bonds and mutual funds. The DFM launched the same yaear as nearby UAE rival the Abu Dhabi Securities Exchange and five years after the nearby Doha Securities Market (now called the Qatar Exchange) was started in in neighboring Qatar. The DFM was converted into a public joint stock company in December 2005 with 80% owned by the government's exchange operator, Borse Dubai, and 20% offered to the public at a price of one UAE dirham per share.[2] DFM's total market value stood at 1,017,114,132 UAE dirhams on July 26, 2009.

Despite the market turmoil resulting from the global financial crisis of 2008, the DFM attracted a big increase in investors last year compared to 2007. The DFM's total investor numbers jumped 26% year-on-year to 535,563, with nearly two-thirds of them UAE traders and more than 10% Omani.[3] DFM also faces plenty of local exchange competition from recently-formed securities exchanges like Dubai Mercantile Exchange (DME), Dubai Gold and Commodities Exchange (DGCE) and NASDAQ Dubai.

Key Product

The market benchmark Dubai Financial Market General Index (DFMGI) is a capitalization-weighted index of DFM stocks listed since January 1, 2004, when its base value was set at 1,000 UAE dirhams.[4] The DFMGI jumped more than 5% in a single day on July 26 as crude oil prices continued rising to $68 per barrel and fears about the broader economy receded.[5] In the past year the DFMGI has fallen from over 5,000 in August 2008 to around 1,700 currently.

Key People

Essa Kazim became DFM Executive Chairman in 2006 after serving there as director general from 1999 after earlier stints at the UAE Central Bank and the Dubai Department of Economic Development. Kazim was elected to the board of international exchange group NASDAQ OMX in March 2008 and is also currently board chairman of the Dubai Stastics Center.[6]

Latest News

Following last year's local securities-market plunge the DFM saw its own corporate 2009 first-half net profit drop by two-thirds year-on-year and its second-quarter profits fall almost 50% year-on-year, the Khaleej Times reported in July 2009.[7] DFM Executive Chairman Essa Kazim said the Q2 results reflected "improved investor appetite" and confidence in the UAE's economy.[8]

References

  1. Dubai Financial Market buys Nasdaq Dubai. The Financial Times.
  2. Background. Dubai Financial Market.
  3. Dubai Financial Market investor base up 26.48 per cent. Gulf News.
  4. DFMGI:IND DFM GENERAL INDEX. Bloomberg.
  5. Dubai Index Climbs Most in 5 Months on Profit, Oil; Qatar Gains. Bloomberg.
  6. Essa Kazim. Forbes.
  7. Dubai Financial Market’s Q2 Earnings Plunge by 48pc. Khaleej Times.
  8. Dubai Financial Market company posts Dhs186.8m net profits in first half year-2009. AMEInfo.com.