Making my debut on Abu Dhabi's bourse

To a newcomer, the floor of the Abu Dhabi Securities Exchange recalls a Las Vegas keno lounge, with a scattering of middle-aged men gazing silently at computer screens hoping their fortunes will change with the blink of a number.

Abu Dhabi - December 14, 2009: Scenes from the Abu Dhabi Stock Exchange. Lauren Lancaster / The National? *** Local Caption ***  ll1412-stockexchange032.jpg
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To a newcomer, the floor of the Abu Dhabi Securities Exchange recalls less the sustained frenzy of Wall Street and more a Las Vegas keno lounge, with a scattering of middle-aged men gazing silently at computer screens hoping their fortunes will change with the blink of a number. I went there this week in the hope of becoming the newest member of the group. Like all exchanges - or bourses, as I soon learned they are also called here - the Abu Dhabi exchange has its own rules and customs. I was curious how they applied to foreigners. Specifically, I wanted to know how difficult it would be for someone like me to open a trading account and what restrictions I would face.

The exchange is on the ground floor of an unremarkable office building on Hamdan Street, identifiable by the obligatory digital ticker scrolling above the door. After passing through a metal detector, a visitor can walk directly on to the floor. Although, apparently, they don't do so very often as of late. "You are the only new face for several months now," one broker told me when I asked about opening an account. Before the financial crisis cascaded into the region, there were typically four to five foreign customers each day, often drawn by an initial public offering that drew excited crowds hoping to capitalise on the region's soaring prospects.

Some days "you couldn't even see the carpet", one exchange employee recalled. On the day of my visit, there were 20 or so men scattered around the exchange, far outnumbered by the empty leather chairs. To apply for an investor number, I supplied a copy of my passport and a second ID at the customer service desk. Then I walked out to the floor and approached the first brokerage I saw, one of a handful that encircle the trading floor. The sales associate told me I could not open an account, as his firm was for Emiratis only, but he pointed me to a brokerage nearby, EFG-Hermes.

The associate there confirmed that I could open an account, and slid a form across the counter. First I asked about any limitations I would encounter, since I knew most companies in the region restricted foreign ownership to some degree. True, he said, but the vast majority of the exchange's listed firms allow foreign ownership up to a certain percentage of the company and he didn't know of any that were near the threshold. "It will not be a problem for you. The only one possibly would be Etisalat," the government-owned mobile firm that is not open to any foreign investment, he said.

Within a matter of minutes, I was the proud owner of an EFG-Hermes brokerage account, although I could not trade until two days had elapsed. I also automatically qualified for an account on the Dubai Financial Market, and received a text message the next morning listing my account number to trade on that exchange. When I returned to ADX two days later, the EFG-Hermes associate told me that to put money into my account I needed to walk across the street to Abu Dhabi Commercial Bank and deposit the money into an account number he provided. I couldn't give him the cash directly? No, he said. And few banks locally would allow electronic transfers. So my only option was to make a cash deposit and physically walk the receipt back to my broker? No, he said, I could fax in a copy of the receipt.

In the US, where legions of traders open accounts and trade heavily without ever leaving the couch, that would be laughable. But fair enough, I figured, and walked across to make my deposit. I returned with a receipt showing my deposit: Dh400, or slightly more than US$100. "I'm now one of your biggest clients," I said. He was not amused. My trading privileges intact, I sidled up to two men among the 25 or so watching the monitors. Next to each monitor sat two accessories familiar to traders the world over - a pack of cigarettes and a mobile phone.

The first man, a Palestinian, helped me get my monitor up and running. He told me he trades at the exchange every day, but laughed when I asked him the secret to making money there. "There is no secret," he said. His friend leaned across him. "Aldar. Sorouh. Good companies." He gave me the thumbs-up sign. Clad in a grey dishdash and a red-checked keffiyeh, he said he was originally from France and later lived in Yemen, but was now based in Abu Dhabi.

I asked him what stocks he was watching and he pointed to his screen, where boxes for Aldar, Sorouh and four other firms flickered the latest trades. I asked if he owned them and he nodded "yes". I asked how many shares he owned, and his face darkened. "No speak English," he said. It was time for me to trade on my own. Before I took the plunge, I found the guy I had met from one of the brokerages and asked him what I should expect as a new trader in this market. I explained that I most recently lived in New York.

He thought it over. "It takes quite a while here for everybody to know the news," he said. As an example, he told me that shares in Abu Dhabi Islamic Bank had traded heavily the day before and few people knew why. The next day, it was announced that the bank would make 25 per cent of shares available for foreign ownership. The stock jumped seven per cent on the news. "Some people made a lot of money," the broker said.

In other words, information is guarded closely and can be immensely valuable. Not much different than other, I thought. Since I had done no research before coming, I picked Aabar Investments - strictly for alphabetical reasons. (Because it is against this paper's policy for me to own shares in companies I might write about, I sold the shares three days later at no profit.) "One hundred shares of Aabar," I told the broker. He told me the market price was Dh2.36, so my outlay was Dh236, plus for the flat-rate Dh75 commission. If I was trading to maximise profits, I would have cancelled the order, given that the commission added such a hefty percentage to the cost per share. But for my experiment, I gave him the nod.

"You just bought," he said. "You will get an SMS." Seconds later, my mobile buzzed. I owned a piece of the market.