ADX and Bahrain Bourse launch region's first digital exchange

Tabadul Exchange Hub will allow investors to directly trade with each other through licensed brokers

The Abu Dhabi Securities Exchange and the Bahrain Bourse simultaneously held a launch ceremony for the Tabadul Exchange Hub. Photo: ADX

The Abu Dhabi Securities Exchange (ADX) and Bahrain Bourse (BHB) launched the Tabadul Exchange Hub, the GCC's first digital exchange hub, aimed at boosting market and economic relations between the two countries.

Tabadul, which highlights the importance of cross-border trade, will allow investors in Abu Dhabi and Bahrain to trade directly with each other through licensed brokers, as well as enable investments between the two nations, the ADX said in a statement on Wednesday.

On a larger scale, the partnership will help increase the bourses' liquidity and efficiency, and drive sustainable growth, Saeed Al Dhaheri, managing director and chief executive of the ADX, said.

“Broadening regional partnerships is a core element of ADX One strategy. The launch of Tabadul is a testament to our commitment to the strategy and to being the market of choice for issuers and investors,” he said.

“Tabadul will strengthen ties between regional exchanges and expand investment opportunities for investors. We look forward to working closely with our partners Bahrain Bourse to further enhance our offering and on-board more capital markets to the hub, enabling the growth of capital markets in the region and supporting the diversification of GCC economies.”

The ADX, the Arab world's second-biggest exchange, has around 20,000 registered Bahraini investors with a total trading value of Dh1.3 billion ($353 million) and volume of 320 million shares in 2021. Tabadul's launch is expected to increase trading activity.

Tabadul, which was formed after a partnership agreement was signed by the ADX and BHB in November, is open to investors who have registered with eligible local brokers and fulfilled documents required by the local exchange in their country of residence.

Securities on Tabadul are traded in the respective exchange’s local currency, and in the specified currency of the traded asset for some cases, with no minimum amount required for orders.

Investors can trade on on-boarded exchanges during designated days and trading hours, according to the statement.

“Capital markets play a vital role in accelerating the development of the economy … we are keen to enhance the investment environment in both countries by exploring new ways of cooperation within the capital market ecosystem to further support the local economy,” said Sheikh Salman bin Khalifa, Bahrain's Minister of Finance and National Economy.

Tabadul will also contribute to Abu Dhabi's economic growth strategy by boosting its financial services sector and accelerating diversification, which in turn will help spur more interest from global investors, said ADX chairman Hisham Malak.

“The launch of Tabadul reflects on the emirate’s commitment to have closer economic ties with nations in the region and enhance market liquidity. It is a step forward in enhancing cooperation between [the] UAE and Bahrain, and will further bring economic prosperity to both nations,” he said.

The ADX and BHB worked together for eight months to help shape and launch Tabadul, which is in line with a Financial Services Sector Development Strategy of the Economic Recovery Plan that prioritises capital market development, said Sheikh Khalifa bin Ebrahim, chief executive of BHB.

“The launch of Tabadul is a milestone achievement within the regional capital markets. Tabadul will be mutually beneficial to both capital markets, supporting the continued sustained growth in both markets by expanding the respective investor bases, and serving to meet the broadened horizons of investors.”

The ADX, with a market capitalisation of about Dh2 trillion, is home to some of the biggest names in the corporate world, including International Holding Company and its subsidiary Alpha Dhabi Holding, Abu Dhabi National Oil Company, First Abu Dhabi Bank, property developer Aldar and telecoms company e& (formerly known as Etisalat).