The Dubai Financial Market (DFM) will allow share prices to rise and fall more sharply, in the latest in a series of moves by exchange officials and regulators to shake up the way stocks are traded in the UAE.
The exchange said yesterday that all shares would be able to increase by up to 15 per cent in one day and fall by a maximum of 10 per cent, from January 2. By allowing stocks to fluctuate more dramatically, exchange officials hope to encourage more trading and reinvigorate a bourse that has seen dwindling volumes in recent months.
The bourse's present rules make a distinction between "active" and "non-active" shares, with different fluctuation limits for each category. The non-active shares can rise and fall only by up to 5 per cent in a single trading session.
Some larger companies on the exchange, including Emirates NBD and Shuaa Capital, are classified as non-active shares on the basis of recent trading activity.
"The new rules will enhance trading on the current non-active stocks," said Essa Kazim, the bourse's chief executive.
According to the DFM's guidelines, a stock is qualified as active only if it meets certain criteria, including 500,000 shares traded and at least 150 transactions in a six-month period.
The new rules will allow trading to continue in all shares until they reach the new fluctuation limits, which could increase volatility but encourage further trading.
"Opening these limits will increase the risk of unjustified drops or rises in price when a single entity is attempting to enter or exit their position," Saad al Chalabi, an institutional trader AlRamz Securities in Abu Dhabi, told Bloomberg. "The market is opening up these limits to encourage liquidity in those names when they do fluctuate abruptly."
The DFM also said yesterday that it would limit the weight of single stocks on the DFM General Index to 20 per cent, down from the previous level of 25 per cent.
Analysts said the move was designed to make the index reflect a broader range of stocks rather than being dominated by a few heavyweights. Emaar Properties, the biggest company on the exchange by market capitalisation, is currently responsible for 20 per cent of the index.
"This move is very good because it gives a chance for small stocks like RAK Ceramics to be represented on the index," said Fadi al Said, a fund manager with ING.
DFM trading volumes have dropped by more than half this year. Regulators and exchanges have introduced measures in recent weeks to give investors more trading options in attempts to boost liquidity.
The Securities and Commodities Authority, the UAE's securities regulator, said last week it would allow margin trading in all publicly traded UAE stocks. Margin trading allows a trader to borrow money from a broker to buy a stock, using other stocks as collateral. There has also been discussion about allowing expanded short selling, which occurs when investors borrow and sell an asset, hoping to profit by buying it back later for less.
NASDAQ Dubai allows short selling, but the DFM and the Abu Dhabi Securities Exchange do not.
The UAE's markets are in the midst of a push for an upgrade from the index provider MSCI to emerging-market status, This would mean the UAE's shares would be tracked by a broader range of international asset managers, probably leading to additional foreign investment in UAE stocks.
* additional reporting by Farah Halime
breagan@thenational.ae
Indoor cricket in a nutshell
Indoor cricket in a nutshell
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
How Islam's view of posthumous transplant surgery changed
Transplants from the deceased have been carried out in hospitals across the globe for decades, but in some countries in the Middle East, including the UAE, the practise was banned until relatively recently.
Opinion has been divided as to whether organ donations from a deceased person is permissible in Islam.
The body is viewed as sacred, during and after death, thus prohibiting cremation and tattoos.
One school of thought viewed the removal of organs after death as equally impermissible.
That view has largely changed, and among scholars and indeed many in society, to be seen as permissible to save another life.
How does ToTok work?
The calling app is available to download on Google Play and Apple App Store
To successfully install ToTok, users are asked to enter their phone number and then create a nickname.
The app then gives users the option add their existing phone contacts, allowing them to immediately contact people also using the application by video or voice call or via message.
Users can also invite other contacts to download ToTok to allow them to make contact through the app.
World ranking (at month’s end)
Jan - 257
Feb - 198
Mar - 159
Apr - 161
May - 159
Jun – 162
Currently: 88
Year-end rank since turning pro
2016 - 279
2015 - 185
2014 - 143
2013 - 63
2012 - 384
2011 - 883
CHELSEA'S NEXT FIVE GAMES
Mar 10: Norwich(A)
Mar 13: Newcastle(H)
Mar 16: Lille(A)
Mar 19: Middlesbrough(A)
Apr 2: Brentford(H)
MATCH INFO
Rugby World Cup (all times UAE)
Final: England v South Africa, Saturday, 1pm
Quick facts on cancer
- Cancer is the second-leading cause of death worldwide, after cardiovascular diseases
- About one in five men and one in six women will develop cancer in their lifetime
- By 2040, global cancer cases are on track to reach 30 million
- 70 per cent of cancer deaths occur in low and middle-income countries
- This rate is expected to increase to 75 per cent by 2030
- At least one third of common cancers are preventable
- Genetic mutations play a role in 5 per cent to 10 per cent of cancers
- Up to 3.7 million lives could be saved annually by implementing the right health
strategies
- The total annual economic cost of cancer is $1.16 trillion
UAE currency: the story behind the money in your pockets
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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