Do not look for a single bourse, a GCC index, or even significantly greater co-operation among regional exchanges any time soon. But the Emirates Securities and Commodities Authority (ESCA), the market regulator in the UAE and the power behind the integration proposal, is cautiously optimistic it will happen some day. Sultan al Mansouri, the Minister of Economy and the chairman of the ESCA, said last week at the Riyadh summit he was convinced uniting was not an option now, but it would be a necessity for the future.
Regional regulators should take a lead from institutions and corporate entities worldwide that are forming alliances to meet the difficulties brought on by the financial crisis, Mr al Mansouri said. "This means, we are in a situation today in which we need more actions than our need for words," he said. The initiative would include a unified Gulf business licence for all public companies, and formulating unified regulations on initial public offerings of stock.
This would mean introducing a common text for co-operation and partnership agreements between brokerage houses and financial service firms. What the proposal does not include is a schedule. The ESCA proposes a technical committee comprising the heads of regional regulators would be charged with ironing out the differences between the various jurisdictions. But the committee would be required to meet only three times a year, which analysts say is not frequently enough.
"It is not a short-term project happening in one or two years. It doesn't look like they are in rush to do it quickly either," says Fadi al Said, a senior fund manager and the head of equities at ING Investment in Dubai. skhan@thenational.ae