Abu Dhabi Securities Exchange (ADX) is pushing ahead with plans to list exchange traded funds (ETFs) within a long-term diversification and development programme, the bourse's Chief Executive said yesterday.

Tom Healy said the launch of ETFs and more diversified investment products would create a stable, sustainable and more liquid market in the capital.

Speaking at the Paris Europlace International Financial Forum, Healy said ADX had been working closely with the Emirates Securities and Commodities Authority (ESCA), and a number of international organisations, to develop the listing of ETFs on ADX as well as the development of more diversified financial products, including derivatives.

"By introducing collective investment schemes and new investment tools, ADX will broaden its appeal away from a predominantly UAE retail-based market to one with a broader balance between domestic investors and international institutions," Healy said in his address, sent to Emirates Business.

"In particular, we have been developing the legal and technical infrastructure required to introduce listed ETFs on ADX. ETFs are a cost-effective way for investors to diversify their portfolios and spread their risk, but they are currently under-developed in the region. We want to change this," he said.

According to bourse officials, Healy and the ADX management have held extensive talks with other exchanges internationally, often resulting in MoUs to share knowledge and expertise that will further benefit the development of Abu Dhabi's capital market.

ADX along with the Dubai bourse form the second largest stock exchange in the Arab World after Saudi Arabia in terms of market capitalisation, which stood

at nearly Dh965 billion on June 30.

In June, the UAE bourses and other stock markets in the Middle East had one of the most turbulent months over the past year as most of them jumped in the first week before they tumbled in the remaining three weeks. Between June 5 and 30, the UAE's two bourses lost nearly $11 billion (Dh40 billion).

The number

Dh965: In billions is the combined market capitalisation of ADX along with Dubai bourse, which positions it as the second largest stock exchange in the Arab World