Abu dhabi stock market
The Abu Dhabi stock market is centred on the Abu Dhabi Securities Market (ADSM), a stock exchange located in Abu Dhabi in the United Arab Emirates (UAE). Abu Dhabi is the capital of the Abu Dhabi emirate, the biggest of the seven emirates that makes up the United Arab Emirates. Abu Dhabi is also the capital of the entire UAE. Abu Dhabi is one of the richest cities in the world and this naturally has a significant impact on the Abu Dhabi stock market, and vice versa.
In the United Arab Emirates you can find the Dubai Financial Market and the Dubai International Financial Exchange as well, but these are separate exchanges. Investors can however trade Abu Dhabi Securities Market shares with some of the brokers based at the Dubai Financial Market. The Abu Dhabi Securities Market have more listed companies than the Dubai Financial Market, but despite this the trading volume is normally much smaller on the Abu Dhabi stock market.
The Abu Dhabi Securities Market (ADSM) was created on 15 November 2000 with the object to trade shares of UAE companies. The trading locations are not only found in Abu Dhabi; you can find them in Al Ain, Sharjah, Fujeirah, and Ras Al Khaimah as well. In 2004-2005, the Abu Dhabi stock market experienced a significant increase in trading activity and share prices. This was followed by a dramatic downturn from the end of 2005 to mid 2006. During the first 6 months of 2006, the overall Abu Dhabi Securities Market Index fell over 30%.
The Abu Dhabi stock market is supervised by the United Arab Emirates Securities and Commodities Authority (SCA). On January 29, 2000, the UAE President issued a federal decree which lead to the establishment of the Securities and Commodities Authority in Abu Dhabi. The Securities and Commodities Authority is responsible for upholding the objectives found in the Federal Law No. (4) of 2000 and strengthen the legislative structure by issuing necessary regulations and instructions for the Abu Dhabi stock market. SCA is currently developing a framework for all the list joint-stock companies and other companies active in the securities field.
Companies traded on the official Abu Dhabi stock market through the Abu Dhabi Securities Market must adhere to a comprehensive set of rules and regulations. If you want to list your company here, it must for instance comply with Federal Law No. 8 of 1984 concerning Commercial Companies. The company must also have been incorporated for at least two years and two balance sheets must have been issued during that period, and audited by and authorized auditor. The paid-up capital must also be at least 50% of the the shareholders' equity, which in turn can be no less than 20 million Dirhams. The shareholders' equity in the company is not allowed to be less than the paid-up capital when you submit the application.
When it comes to shares, the shareholders' rights must be equal, but only within each class of shares issued by the company. These are just a few examples of the rules applied on companies active on the Abu Dhabi stock market. As you can see, they are fairly similar to rules used by stock exchanges throughout the world.
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