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10.5 Billion Dirhams of Facilities Financing Margin Trading in Abu Dhabi Securities Exchange
Oct 04, 2016
The total value of margin trading in Abu Dhabi Securities Exchange (ADX) has reached 10.5 billion Dirhams during the first nine months of 2016. The value of margin trading, according to Mr. Rashed Al Blooshi, Chief Executive of ADX, has represented %15.5 of total trade deals in the market that equaled 68 billion Dirhams.
 
Real estate companies had the lion share of margin trading facilities provided by brokers, equaling 66%. Al-Sharq real estate was the most active company with 3.33 billion Dirhams in deals, followed by Al-Dar with 1.7 billion Dirhams and Manazel, 978 million Dirhams. Meanwhile, margin trade deals on First Gulf Bank shares equaled 734 million Dirhams.
 
“Margin trade services has improved significantly during the past few years and contributed to the increase in liquidity,” said Mr. Al Blooshi. “ADX has the authority to grant licenses for this product which helped financing a large segment of traders. And after upgrading ADX to become an emerging market by Morgan Stanley, this service has enabled brokers to increase their income and improve their competitiveness as well as becoming a point of attraction for local and foreign investors alike.” He added.
 
The constant growth in margin trading comes in parallel to the increase in number of brokers in ADX, which reached 47. The total number is expected to increase in the near future, according to Mr. Al Blooshi. The margin trading rules of procedures was issued in 2008 and allowed brokers to finance a percentage of their clients’ investments – against certain guarantees. It stipulates that the broker has the technical and financial abilities for practicing margin trades. Additionally, brokers must have the financial solvency prior to applying for a license.

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