UAE given emerging market status

The Standard and Poor’s (S&P) Dow Jones has upgraded the status of the Emirates Securities Markets (ESM) from ‘Frontier’ to ‘Emerging Market’.

The achievement came in less than six months of a similar achievement as the Morgan Stanley Capital International (MSCI) also upgraded the ESM last June from "Frontier" to ‘Emerging Market’.

The Securities and Commodities Authority, quoting the S&P Dow Jones report, said that the ESM has met all the necessary requirements to deservingly earn the upgrade which was consensually agreed by all market parties.
The report cited the SCA board’s approval of Market-Maker Regulation side by side with other related regulations like the Securities Lending and Borrowing, Short-selling and Liquidity Provider regulations.

Explaining its decision to upgrade the ESM, S&P said it is also attributed to the ESM’s successful implementation of the Delivery Versus Payment (DVP) mechanism since May 2013, a mechanism which allows the settlement of the purchasing investor in cash in the rare event of a lack of securities on a due date in a sale-purchase deal.

The report said the current 49 per cent rate of foreign ownership is satisfactory, compared to other countries which are in the "emerging market" grade, adding that there are possibilities of the figure being increased in the future.

Commenting on the achievement, Sultan Saeed Al Mansoori, Minister of Economy and SCA Board Chairman, said the upgrade of ESM to "Emerging Market" status by the S&P Dow Jones is an international certification of the significant development of UAE local stock markets and recognition of its elevation to international level, adding that the ESM boasts of high capabilities that reflect a strong national economy.

He pointed out that the S&P Dow Jones decision reflects the SCA’s sustained efforts to be a pioneer in the developing of the markets, which are arguably one of the pivots of economic and financial growth, and to boost the country’s competitiveness status in various indices and international arenas, in accordance with the best international practices and the SCA’s strategic objectives, as well as the objectives outlined by the UAE Vision 2020.

He cited efforts being made by the SCA, in collaboration with the Abu Dhabi Stock Exchange (ADX) and the Dubai Financial Market (DFM), to provide a very attractive investment environment in the country and advanced legislations which would form a cordial framework for protecting the rights of all parties and meeting the demands of local and foreign investors alike.

Commenting on the latest accomplishment, Abdullah Al-Turifi, SCA Chief Executive Officer, said the most significant advantages the UAE market upgrade will bring include greater international confidence in the local markets, the public joint stock companies operating in those markets and supervision methods in those markets, placing them under the focus of international rating agencies.

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