Abu Dhabi Securities Exchange (ADX), which has a market capitalisation exceeding Dh400 billion, said on Tuesday it had launched technical short-selling (TSS) services as part of efforts to boost waning liquidity and attract more foreign investors.
The ADX had announced plans in December to introduce short-selling - the practice of selling borrowed shares in the hope of buying them back later at a lower price - by the end of March. The Dubai Financial Market announced in January plans to introduce covered short-selling but has yet to set a firm date for implementation.
“The launch of this new service falls in line with ADX’s strategy to increase liquidity levels as well as diversify investment and hedging instruments in order to better attract specialised foreign investors,” said the exchange. “The TSS service allows the investor to sell stocks that they don’t own, but can afford within the applicable settlement period (T+2), in order to achieve profit buying the stock back if the value goes down.”
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Dubai stock market targets short-selling by year end
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To regulate short-selling, the bourse will suspend trade in a given stock if its reference price falls 5 per cent in a day or if the short sold securities reach 10 per cent of total capital issued, limitations which could put off investors and will make it harder for the service to gain traction, brokers said. The exchange did not specify which stocks will benefit from short-selling services.
“This service comes within the framework of Abu Dhabi Securities Exchange’s strategy to enhance the investment environment in the emirate and attract more foreign investment, in line with Abu Dhabi's 2030 Economic Vision," said Rashed Al Blooshi, the chief executive of ADX.
Al Safwa Mubasher Financial Services will be the first brokerage to offer this service.
Brokers had mixed reactions to the launch of short-selling in the UAE.
Menacorp is in the process of introducing the service and is awaiting regulatory approval but hopes to start providing short-selling services before the end of the year, said Nabil Al Rantisi, the managing director of the brokerage at Menacorp.
“While investors might be against allowing short-selling - it was cited as a cause of the 2008 crisis in some developed countries - it will eventually, in my opinion, increase market sophistication and bring matured investors to the table,” said Tariq Qaqish, the managing director of asset management at Menacorp. “We do expect to see more interest from foreign investors supported by their experience in their countries as it has been developed for years now and has plenty of active hedge fund strategies.”
NBAD Securities is currently not considering offering short-selling services and will wait to see how the market reacts to its introduction, said Mohammed Yasin, the managing director of the brokerage.
“ADX took this step to get brokers and investors used to the idea of short-selling but it is very limited in its current implementation and it is very limited in its effects on the market,” said Mr Yasin.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
MATCH INFO
Champions League quarter-final, first leg
Manchester United v Barcelona, Wednesday, 11pm (UAE)
Match on BeIN Sports
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
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- Fast fashion is responsible for up to 10 per cent of global carbon emissions
- Fast fashion is responsible for 24 per cent of the world's insecticides
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Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
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The specs: 2018 Volkswagen Teramont
Price, base / as tested Dh137,000 / Dh189,950
Engine 3.6-litre V6
Gearbox Eight-speed automatic
Power 280hp @ 6,200rpm
Torque 360Nm @ 2,750rpm
Fuel economy, combined 11.7L / 100km
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Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
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Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
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Killing of Qassem Suleimani
The specs: 2018 Mitsubishi Eclipse Cross
Price, base / as tested: Dh101,140 / Dh113,800
Engine: Turbocharged 1.5-litre four-cylinder
Power: 148hp @ 5,500rpm
Torque: 250Nm @ 2,000rpm
Transmission: Eight-speed CVT
Fuel consumption, combined: 7.0L / 100km
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Scoreline
Ireland 16 (Tries: Stockdale Cons: Sexton Pens: Sexton 3)
New Zealand 9 (Pens: Barrett 2 Drop Goal: Barrett)
How to avoid crypto fraud
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