Occasional irregularities in local markets are to be expected as companies become accustomed to tighter ethical standards, says the chief executive of the regulator.
Conflicts of interest among executives, breaches of minority shareholder rights and insider dealing are often cited as weaknesses in the UAE business culture.
"It will take time," said Abdullah al Turifi, the chief executive of the Emirates Securities and Commodities Authority (SCA). "You cannot prevent mistakes from happening, but you can decrease the size of the damage that comes from these issues. Corporate governance is still a new introduction for the UAE."
Mr al Turifi, speaking on the sidelines of the regulator's annual summit in Abu Dhabi, also said he anticipated up to five UAE companies would go public this year as market conditions improved.
The SCA, which was created 10 years ago, has been tightening its laws and regulations as markets declined after the financial crisis. Last month, Riad Kamal, the chief executive of Arabtec Holding, was banned from buying shares on UAE markets for six months for trading in Arabtec shares during a prohibited period, which many observers interpreted as a tightening of regulation. Mr al Turifi said the decision spoke for itself and declined to comment further.
A steady stream of negative catalysts has reduced confidence and liquidity on the country's exchanges since the onset of the property price fall at the end of 2008, pushing institutional and foreign investors to the sidelines.
The UAE's bourses have also underperformed their regional peers. Last year, Dubai's main index, the Dubai Financial Market, lost 12 per cent and the Abu Dhabi Securities Exchange fell 1.8 per cent. But the Qatari index, buoyed in part by Qatar's winning bid to host the FIFA 2022 World Cup and government investment, gained 24 per cent. Saudi Arabia, the Arab world's largest economy, rose 8.3 per cent.
Mr al Turifi said most of the problems could be attributed to the financial crisis and not problems unique to the UAE. "We hope the sluggish volumes do not last too long," he said. Other observers said the SCA would play a key role in reversing the trend. "One common problem that foreign investors tell us is that the level of transparency and protection for minority shareholders is very weak, which is a big drawback in their lack of confidence in the markets," said Khaled al Masri, the head of investment at Rasmala Brokerage in Dubai. "They still have a long way to go."
Market players have been calling for a merger of the country's local bourses in an effort to boost liquidity and as a precursor to a potential inclusion to MSCI's emerging market index.
Mr al Turifi said the SCA did not have a position on a proposed merger but acknowledged the bourses were exploring a range of potential changes. "Any decision that the two exchanges come to, we will welcome, whether it's a merger or a different type of structure where they can link together, such as the Euronext system," he said.
Mr al Turifi said he had not seen a Goldman Sachs report commissioned to study a potential merger.
At present, the UAE is classified as a frontier market, which institutional and foreign investors regard as more volatile and therefore less attractive as an investment destination.
"As with any maturing market, consolidation needs to take place, and in the UAE the question is whether or not there is enough room for three exchanges, two market regulators and the UAE Central Bank," said Andrew Tarbuck, a corporate partner at the Dubai law firm Latham & Watkins. Separately, Mr al Turifi said he expected up to five companies from the insurance and services sector to go public by the fourth quarter, as market conditions improve.
"The markets are ready for new listings, and we encourage them," he said.
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
The story of Edge
Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.
It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.
Edge has an annual revenue of $5 billion and employs more than 12,000 people.
Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab
COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EAlmouneer%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Dr%20Noha%20Khater%20and%20Rania%20Kadry%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EEgypt%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E120%3Cbr%3E%3Cstrong%3EInvestment%3A%20%3C%2Fstrong%3EBootstrapped%2C%20with%20support%20from%20Insead%20and%20Egyptian%20government%2C%20seed%20round%20of%20%3Cbr%3E%243.6%20million%20led%20by%20Global%20Ventures%3Cbr%3E%3C%2Fp%3E%0A
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
How to tell if your child is being bullied at school
Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
Ability to sleep well diminishes
Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
The specs
Engine: 4-litre twin-turbo V8
Transmission: eight-speed PDK
Power: 630bhp
Torque: 820Nm
Price: Dh683,200
On sale: now