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16 July 2024

UAE urges end to Gulf stocks speculation

By Nadim Kawach



The UAE opened a Gulf bourses conference yesterday with a call for an end to widespread speculative buying into stocks, and expansion of investment instruments to upgrade market performance and pave the way for a merger.

Minister of Economy Sultan bin Saeed Al Mansouri said stock exchanges in the six-nation GCC have largely developed over the past few years and played a key role in attracting foreign capital.

But he stressed more work needs to be done to boost their role in sustainable development and luring in foreign capital, calling for taking advantage of a sharp economic growth because of high crude prices and upswing in the non-oil sector.

“Experiences over the past 20 years have shown there is a strong relationship between successful stock markets, strong economy and successful reform programmes,” he told the third annual GCC Stock Market Forum.

“Our markets have made big achievements thanks to serious initiatives in member states… but such achievements should not detract our attention from the challenges besetting these burgeoning markets, specially the need to increase investors’ awareness, end speculation in the market, and diversifying investment instruments… these steps are needed to ensure rules and legislations in our stock markets are unified and integrated.”

Another GCC official at the two-day conference said GCC bourses have become a major channel for attracting investment and absorbing excess liquidity, but called for unification of legislation and corporate laws to pave way for the creation of an integrated bourse following the launch of the Gulf common market.

Abdul Rahim Naqi, Secretary-General of the Saudi-based Federation of the GCC Chambers of Commerce and Industry, said regional exchanges still suffer from lack of investment funds, transparency and delay in issuing financial results by listed companies.
His figures showed investment funds accounted for only around three per cent of the total investment in those markets.
“The GCC markets are suffering from the limited institutional investment, low level of transparency, failure by some companies to comply with auditing standards and a delay in issuing their financial results,” he said.

“This means the investor is having difficulty in getting correct information and this is adversely affecting the credibility of our markets.”