Dubai: Country and Foreign Investment
Dubai stock market trading began in March 2000 in the Dubai Financial Market (DFM).
DFM operates as a secondary market for trading of securities issued by public shareholding companies, bonds issued by the Federal Government or any of the Local Governments and public institutions in the country, investment units issued by local investment funds and any other financial instruments, local or foreign, which are accepted by the Market. Located in the Dubai World Trade Center, the Market is regulated by the Emirates Securities and Commodities Market Authority (ESCA). Its rules ban insider trading and enforce transparency rules and release of information guidelines.
The fall of Saddam Hussein in Iraq led to a major influx of investment in the stock markets of the United Arab Emirates, including the Dubai Financial Market, with market capitalisation jumping significantly to reach a level of AED4.5 billion (US$1.23 billion), up 17%, by late 2003.
Abdullah Salim Al Turifi, Executive Director of ESCA, said: "Adoption of stringent regulations and corporate governance, transparency of the companies' half yearly and quarterly profits, restoration of investors' confidence in the stock market regulations and absence of alternative investments opportunities are some of the reasons that helped in local market growth in the last nine months."
DFM has an electronic share registry, order-driven trading and a clearing system that can support six trading floors and link more than 3,000 terminals. Share tickers are displayed on TV, the Internet, Reuters, Bridge and Teletext. Trading hours are 10.00am -2.00pm Saturday through Thursday.
In November 2008 DFM merged with NASDAQ Dubai (see below).
On 11 July, 2010, NASDAQ Dubai outsourced its trading, settlement, clearing and custody functions for equities to DFM as part of a strategy to increase trading volumes. At the same time, the outsourcing created a deep liquidity pool with over 550,000 investors.