A Rights Issue is a financial instrument representing rights that are legally granted to the company’s shareholders to have priority in subscribing for capital increase shares.
His Excellency Essa Kazim, Chairman of DFM said, “The DFM is constantly exploring development and introduction of new services in line with the expectations of various market participants. The Exchange has initiated a Rights Issues’ trading service, which has provided investors with new and flexible financial instruments to benefit from capital increases of listed companies. This service has enabled investors to sell their rights and gain additional liquidity while deciding not to subscribe to the new shares. The implementation of thousands of trades with a total value exceeding AED 500 million undoubtedly indicates investors’ strong appetite for this new tool. DFM has implemented an extensive awareness campaign through numerous channels including; the DFM website and media as well as SMS to update investors on various details of the Rights Issues’ trading.”
It is noteworthy that DFM has launched this service in 2015 with the trading of Takaful Emarat Rights Issue, compared to three companies to date in 2016 with 12,813 trades on 747,653,904 rights issues.
Table summarizes Rights Issues’ trading on DFM since the beginning of 2016: