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Dubai Financial Market (DFM)
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Dubai Financial Market background and history
The Dubai Financial Market (DFM) is based in the Trade Centre Building in Dubai and began operations on 26 March 2000. It was initiated to provide a market for trading shares in Dubai and UAE public companies or Public Joint Stock Companies (PJSC). Emaar Properties PJSC and Amlak Finance PJSC are two well known companies listed on the Dubai Financial Market.
The Dubai Financial Market is different from the Dubai International Financial Exchange (DIFX) which, although it also trades stocks and shares, is focused on international company listings rather than Dubai and regional companies. When people refer to the Dubai stock market (or Dubai stockmarket), the Dubai stock exchange, the Dubai share market (or Dubai sharemarket), the Dubai equities market or similar expressions, usually they mean the Dubai Financial Market.
Despite the impressive growth in the Dubai Financial Market since it started in 2000, it still only accounts for a very small fraction of world trade in stocks and shares - about 0.3% in 2006.
The regulatory authority for the Dubai Financial Market is the Emirates Securities and Commodities Authority or ESCA (sometimes just SCA). ESCA are also the regulators for the Abu Dhabi stock market which is referred to as the Abu Dhabi Securities Exchange or ADX (previously known as the Abu Dhabi Securities Market or ADSM). The regulatory body for the DIFX is the Dubai Financial Services Authority (DFSA), a separate and independent body.
Dubai Financial Market trading, listed companies and brokers
At the end of 2006 there were 63 companies listed on the Dubai Financial Market, and over 90 stock brokers serving investors and traders on the DFM. However, of these 63 companies, only a handful are actively traded with EMAAR usually accounting for the overwhelming majority of daily activity by value, about half to two-thirds of the total traded value on DFM. Daily activity on the Dubai Financial Market during 2006 was 500m dhs to 1 bn dhs on average.
During the latter half of 2005 when the UAE stockmarkets were smoking, daily volumes were often in excess of 2 billion dhs with one day in August over 5 billion dhs and the following day over 11 billion dhs. This huge day was due to fraudulent trading in DIB (Dubai Islamic Bank) shares, and all DIB trades on the DFM for that day were subsequently cancelled. The court cases to penalise the offenders are still not resolved as of December 2006.
A list of the more actively traded stocks on DFM is below. DEYAAR ownership is restricted to UAE and GCC nationals only. All others in this list can be traded by any nationality. Gulf Navigation foreign ownership allowed from 05 May 2008, Aman Insurance foreign ownership approved in EGM 26 May 2008.
| Information | Message Board | Notes |
|---|---|---|
| AIRARABIA | Air Arabia PJSC | Air Arabia IPO Mar 2007, listed on 17 Jul 2007 |
| AMAN | Dubai Islamic Insurance | not as actively traded as the others in this table |
| AMLAK | Amlak Finance PJSC | |
| ARMX | Aramex Logistics | |
| ARTC | Arabtec Holding PJSC | |
| DFM | Dubai Financial Market | DFM IPO - Nov 2006, listing date Wed 07 Mar 2007 |
| DEYAAR | Deyaar Development PJSC | Deyaar IPO May 2007, subsidiary of DIB, listed 05 Sep 2007. |
| DIC | Dubai Investments PJSC | sometimes called Dubai Investments Company |
| DIB | Dubai Islamic Bank | |
| DU | DU telecom | Full name is Emirates Integrated Telecommunication Services |
| EMAAR | Emaar Properties PJSC | |
| GULFNAV | Gulf Navigation Holding | Gulf Navigation IPO - Jul 2006, listing date Wed 07 Feb 2007 |
| IAIC | Islamic Arab Insurance Company | sometimes referred to as Salama |
| SHUAA | Shuaa Capital PJSC | |
| TABREED | National General Cooling Company | |
| TAMWEEL | Tamweel Finance | |
| UPP | Union Properties |
The remainder of Dubai Financial Market stocks are traded only occasionally with some seeing days or weeks pass without any trading. EIB - Emirates Islamic Bank is one of several that has yet (up until Dec 2006) to see a single trade since first being listed.
The DFM website is located at www.dfm.ae or www.dfm.co.ae. There is a new version under testing during 2006 at www2.dfm.ae or www2.dfm.co.ae.
Dubai Financial Market IPO
The Dubai Financial Market IPO was initiated on 28 May 2006 by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, when he instructed the DFM to prepare for an Initial Public Offering of 20% of the share capital of the Dubai Financial Market. The DFM IPO opened on 12 November 2006 and was 300 times oversubscribed.
Dubai Financial Market finances December 2006
- IPO price 1 dh per share plus 3 fils subscription fees per share.
- 2005 profit Dh 1.25 billion on total revenues of Dh 1.29 billion.
- Earnings for 2006 expected to be about AED 1.2 to 1.3 billion (revised upwards after the addition of about 400 million dhs from IPO subscription)
- Total capital AED 8 bn with AED 6.4 bn owned by Dubai Government, and 1.6 billion shares available for the DFM IPO.
- Foreign investors could buy up to 680m shares or 8.5% of the IPO. The remainder was reserved for UAE nationals.
Buying and Selling shares on the Dubai Financial Market
A summary of the steps to follow to trade securities or equities on the DFM is
- Obtain an investor card for Dubai Financial Market.
- Find a broker and open an account for trading on DFM.
- Deposit funds with the broker.
- Buy shares in DFM companies via your broker either in person, by phone, fax, or online.
- Sell them later, hopefully when they're worth more than what you paid for them.
See these pages and sites for more information about the Dubai Financial Market
- Dubai Financial Market investor application process
- forms required for registering with DFM
- Share Wadi fair value estimates for listed companies
- Companies on DFM and ADSM allowing foreign ownership
- FAQs for investors interested in the Dubai Financial Market
- Discussion forum for DFM shares
- View previous Daily Dubai Financial Market share reports or sign up for free daily email reports here.
- View the list of brokers in the UAE, or read and discuss UAE brokers.
Disclaimer: ShareWadi.com and DubaiShareTalk.com provide UAE stockmarket related information, but do not offer investment advisory services, or brokerage services. Investing in shares is risky, you can lose some or all of your money and/or other assets. Anything you read on this site should be regarded as the opinion of the author only and is not to be taken as advice to buy, sell, or hold shares and/or other investments. Do not make investment decisions without due diligence and/or professional advice. In particular, do not assume anything you read on this site is correct or accurate. You should make your own investigations to determine if information is accurate and ultimately, you should accept that you and you alone are responsible for any investing decisions you make.
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This page last updated 27-May-2008.
E & OE.