Dubai, Egypt mull dual listing framework

Dubai Financial Market (DFM) announced today it will collaborate with the Egyptian Exchange to set up a comprehensive framework that will pave the way for listed companies on both exchanges and specifically those with significant operations in the UAE and Egypt to dually list their shares.

In a statement, the Dubai bourse said the initial agreement between the two sides was the outcome of the Egyptian Exchange’s delegation visit to DFM as part of a GCC roadshow. The delegation, headed by Mohammed Abdulsalam, Chairman of the Egyptian Exchange, held discussions at DFM with Essa Kazim, Managing Director and CEO, DFM PJSC.

“The Egyptian Exchange is at the forefront of various regional and international exchanges [that] DFM has kept close relations with since its inception in the year 2000,” said Kazim. “We are confident that this initial agreement to set up the required framework to promote dual listing constitutes a pivotal point that will further increase the cooperation between the two sides. We are considering a memorandum of understanding that will outline the areas of cooperation, the necessary mechanisms and the timeframe to achieve our goals in addition to sharing expertise in information technology and training.”

He added: “DFM is the main destination for companies looking for a dual listing in this region, with 20 listings from Kuwait, Bahrain, Sultanate of Oman and Sudan. Clearly, the enthusiasm to dual list on DFM in parallel with the main listing stems from the significance of the UAE for them, as well as DFM’s liquidity and attractiveness for investors.”

Kazim added that such an arrangement would benefit liquidity at both exchanges. “Taking the relations between two of the major exchanges in this part of the world a step forward will further improve the liquidity and benefit both investors and companies. As we all know the Egyptian market is one of the main international markets for UAE companies including many DFM listed companies. Similarly, there are many Egyptian companies that have major operations in the UAE. Those companies are ideal for potential dual listings, and we are going to have the suitable framework to see this happening at the earliest,” he said.

“There are promising opportunities for DFM and the Egyptian Exchange which complement each other’s strengths in light of their competitive advantages,” said Mohammed Abdulsalam, Chairman of the Egyptian Exchange.

“Additionally, the dual listings we are considering will further diversify investment opportunities offered to investors. We may see important DFM listed companies such as the real estate companies go for a dual listing on the Egyptian Exchange and major companies from food industries and services opt for a dual listing on DFM. Undoubtedly, having the flexible framework in place that allows companies to list shares or Global Depository Receipts (GDR) will enable us to list as much as possible of these companies in the future.

“Additionally, the two sides recognize the importance of having an effective mechanism for disclosing dual listing companies’ information. Without having the highest levels of transparency, investors will not be encouraged to trade on dual listed stocks. We will further collaborate to study the best approach to apply corporate actions such as cash dividend and capital increase. We are confident that there are many underlying opportunities which await the encouraging environment to materialize, hopefully we can achieve this in the near future”, Mohammed Abdulsalam added.

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