FNC insists on better education for stock market consumers

Securities and Commodities Authority criticised in report – but it rejects claims.

Powered by automated translation

ABU DHABI // Federal National Council members are calling on the stockmarket regulator to improve investment literacy among Emiratis.

In a critical report released last week scrutinising the Securities and Commodities Authority (SCA), the FNC said there was a lack of awareness among the investment community regarding governance.

This had led to some investors turning to short-term investments and speculation, in turn ignoring market studies and the possible long-term effects on the country, the council’s finance committee said.

There was also a lack of confidence in the market by Emirati investors, it said.

The report revealed that following a full review of the SCA’s 2014/2016 strategy, the committee found the authority was not addressing the lack of investment awareness.

When the committee questioned senior SCA officials, they said they had already conducted programmes to raise investment literacy.

Over the past three years, they said, 84 lectures and events had been held. These were aimed at the general public, financial analysts and university students.

They also held annual conferences and workshops with market experts, explaining technical information and listening to public concerns.

The SCA said it distributed several publications that simplified market concepts and included clear illustrations with real-life examples.

The authority has also been streaming YouTube videos explaining the local stock market. A number of TV programmes were presented in partnership with CNBC and Dubai TV.

Despite these efforts, turbulence in the market had caught out many, prompting Ali Al Nuaimi (Ajman), the finance committee’s rapporteur, to say: “Investors need to be made more aware.

“They should not easily panic and sell shares and cause problems in the market so easily. They need more awareness. They need to be more educated. Market speculation needs to be built on a foundation, not based on rumours.”

He said Emiratis trading in the stock market needed to know that the “Government cannot always protect you”.

Last month, Sultan Al Mansoori, the Economy Minister and SCA head, urged investors to base their investment decisions on logic and reason rather than emotions.