NASDAQ Dubai triggers DFM loss
Dubai Financial Market (DFM), the Arab world's only publicly listed stock exchange, swung to a loss in the third quarter.
The DFM posted a net loss of Dh2.9 million (US$789,651) in the third quarter, down from a profit of Dh71.5m in that period last year.
The company blamed the results on the performance of NASDAQ Dubai, the emirate's second bourse in which it holds a two-thirds stake.
DFM completed the acquisition of its NASDAQ Dubai stake in May.
Because the DFM now has a controlling stake in NASDAQ Dubai, it has to include any profits and losses from that bourse into its own balance sheet. Without those, DFM would have posted a profit of Dh3.8m. DFM's nine-month profit was Dh77.8m, down from Dh258m in the same period last year. Its stock fell 3.5 per cent to Dh1.64 ahead of yesterday's announcement.
The consolidation of the two exchanges has led to an improvement in market activity, said Essa Kazim, the chief executive of DFM.
"We have seen a gradual improvement in investors' sentiment and a renewed attention from foreign investors triggered by encouraging developments, such as the recent inclusion of UAE markets in the FTSE Global Index," Mr Kazim said.
The merger is likely to drag on earnings this year, analysts said.
"We expect it to continue doing so in the short term as we see minor cost synergies and limited additional revenue generation," said Ghida Obeid, an analyst at Shuaa Capital.
Published: November 8, 2010 04:00 AM