Abu Dhabi Securities Exchange, ADX, on Sunday announced that it is reducing its trading commission fees starting 1st July 2019, thus making ADX among the MENA region’s least expensive stock markets with regards to trading commissions.
The ADX is reducing its trading commission with a range from 50 percent up to 90 percent.
ADX cost for annual transactions of less than AED250 million will be five basis points (0.05 percent) of the transaction value. For transactions in excess of AED1 billion over the period of one year, the cost will range to one basis point.
In other words, an investor who trades AED500 million a year will be charged five basis points over the first AED250 million and then a commission lower than AED250 million during the year. The Exchange’s trading commission has also been reduced for transactions exceeding AED1 billion by 90 percent from the previously implemented transaction fees, which makes ADX one of the region's least expensive stock markets in terms of trading commission.
Prior to the implementation of this new initiative, ADX has set up a number of awareness sessions for the stakeholders in order to familiarise them with the new mechanism.
This initiative is designed to reduce costs on investors, build confidence, increase liquidity, as well as attract more investors into the Exchange.
The new initiative not only reinforces ADX’s competitive position, but it is also a key step towards achieving the Ghadan 2021 plan's objective of removing barriers and lowering the cost of doing business in Abu Dhabi. The seeds of the initiative were first sown in June 2018 with the announcement by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, of a three-year, AED50 billion stimulus package for Abu Dhabi.
ADX continuously seeks to launch new initiatives aimed at diversifying investment products available to its stakeholders. This approach helps facilitate the expansion and diversification of the Emirate’s economy. It will also allow Abu Dhabi to compete as a primary centre for attracting Foreign Direct Investment, FDI, as well as contributing to the Emirate’s sustainable development goals.
Commenting on this initiative, Khaleefa Al Mansouri, ADX Acting Chief Executive, said, "Through this initiative and the introduction of other investment opportunities, the Abu Dhabi Securities Exchange is providing additional incentives for both local and international investors to invest on the Exchange providing liquidity into the market and helping to finance listed companies’ projects which will support the expanding of their business."
The number of institutional investors in the ADX at the end of May 2019 was 8,395, including 6,318 foreign investors. During the first five months of this year, institutional investors traded AED1.5 billion compared to AED890 million in the same period of 2018, an increase of 73 percent. This shows a positive trend on a medium to long term basis.