ADX commission fees cut to boost Abu Dhabi further

Exchange confident that reducing the trading commission fees will enhance the business and investment environment in emirate

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Abu Dhabi has, in a relatively short period, developed into an advanced city and one of the leading financial locations not just in the Middle East and North Africa but also globally.

According to the Global Financial Centre’s Index (GFCI), Abu Dhabi ranks 26th out of 102 financial centres, ahead of Paris and Geneva, which occupy the 27th and 28th places, respectively. Economically, the emirate is in a strong position, with gross domestic product (GDP) at current prices (nominal GDP) growing to Dh931 billion in 2018, up 14.4 per cent up from Dh814bn in 2017.

Furthermore, S&P Global recently affirmed the emirate’s AA/Stable/A-1+ credit rating, stating: “the exceptional strength of the government’s net asset position provides a buffer to counteract the effect of oil price swings on economic growth.”

This solidifies our aspiration for the UAE to advance further and to become globally competitive. At Abu Dhabi Securities Exchange (ADX), we are proud to play an essential part of this ambition.

An investor monitors a screen displaying stock information at the Abu Dhabi Securities Exchange June 25, 2014. The spectacular rise and fall of Arabtec, Dubai's most heavily traded stock, teaches hard lessons about how risky the region remains for investors even as its rapid economic growth lures billions of dollars in fresh funds from abroad. Wild trading by local retail investors who dominate activity, plus weak corporate disclosure and a hands-off approach by regulators, can make a toxic mix, and on occasion destabilise entire markets.  REUTERS/Stringer  (UNITED ARAB EMIRATES - Tags: BUSINESS) - GM1EA6P1SB001
ADX measures are a key plank in the further advancement of Abu Dhabi. Reuters

One of ADX’s first actions to help realise Abu Dhabi’s vision to make its economy even more dynamic and globally integrated was to incentivise investment on its exchange by reducing trade commission fees. This reduction starts at 50 per cent and goes up to 90 per cent.

There are a number of upsides and advantages to this momentous step. When the board sat down many months ago, the reasons put forward for the the reduction in transaction fees were as follows:

1) Performance-driven: by reducing its commission fees, ADX confirms its commitment to increasing liquidity and overall activity in its capital market. The initiative is a significant shift towards promoting long-term investment that will create new economic opportunities.

2) Create an efficient market environment: the reductions of the commission fees recently announced by ADX are designed to act as a magnet for foreign investments, which will help the emirate to diversify its economy. The ADX initiative is considered as the first pivotal step toward achieving this goal.

3) Contribution to Abu Dhabi economic development: the reductions of ADX’s commission fees reflect a broader drive to deepen capital markets by providing more options for investors and great opportunities for government entities to raise capital. It will lead to wealth creation, whether in terms of generating new business and sparking bigger traded volumes on the stock market.

4) Unique value proposition: by reducing its commission fees, ADX now boasts the lowest rate in the region, enhancing Abu Dhabi’s reputation as a great place to invest. By removing barriers and costs of doing business, ADX is making its investment platform attractive.

We are confident that reducing the trading commission fees will enhance the business and investment environment in Abu Dhabi even further. Through this initiative and the introduction of other investment opportunities, ADX is providing additional incentives for both local and international investors to invest on the exchange.

The collective efforts of ADX will help to support improving the Abu Dhabi business and investment environment, alongside other core tenets including society, knowledge and innovation, and lifestyle.

We hope to make a big contribution towards creating a brighter world for Abu Dhabi.

Khalifa Salem Al Mansouri is acting chief executive of ADX