Most commodities traded in UAE are:
1- Oil & Gas
2- Gold & Precious metal
3- Aluminum
4- Copper
5- Rice
6- Wheet
7- Cement
8- Reinforced Concrete
Tuesday 18 March 2008
Major Players In UAE Market
They are major players (companies) in UAE market.
1- Dubai Financial Market
2- Abu Dhabi Securities Market
3- The Dubai Multi Commodities Centre (DMCC)
4- Dubai Gold & Commodities Exchange (DGCX)
Abu Dhabi Securities Market
The Dubai Multi Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated 'A' by Standard & Poor's, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones, energy and other commodities industries.
DMCC is also a free zone authority offering 100% business ownership, a guaranteed 50 year tax holiday and freehold property options.Launched in 2002, this strategic government initiative has been established to support the specific needs of its core segments - Gold & Precious Metals, Diamonds & Coloured Stones, Energy and Other Commodities industries.
1- Dubai Financial Market
2- Abu Dhabi Securities Market
3- The Dubai Multi Commodities Centre (DMCC)
4- Dubai Gold & Commodities Exchange (DGCX)
Abu Dhabi Securities Market
The Abu Dhabi Securities Market (ADSM) was established on 15 November 2000 by Local Law No. (3) of 2000, the provisions of which vest the Market with a legal entity of autonomous status, independent finance and management, and give ADSM the necessary supervisory and executive powers to exercise its functions. These functions are:
Provide opportunities to invest savings and funds in securities in order to benefit national economy.
Ensure the soundness and accuracy of transactions and to ensure the interaction between demand and supply in order to determine prices.
Provide opportunities to invest savings and funds in securities in order to benefit national economy.
Ensure the soundness and accuracy of transactions and to ensure the interaction between demand and supply in order to determine prices.
Protect investors through establishing fair and proper dealing principles between various investors.
Impose stringent controls over securities transactions to ensure sound and conduct procedure.
Develop investment awareness by conduction studies and issuing recommendations in order to ensure that savings are invested in productive sectors.
Ensure financial and economic stability and develop trading methods in order to ensure liquidity and stability of prices of Securities listed on the market. Moreover, ADSM has the authority to establish centers and branches outside the Emirate of Abu Dhabi. To date it has done so in Fujeirah, Ras al Khaimah, Sharjah and Zayed City. The Abu Dhabi Securities Market’s board of directors is comprised of seven members nominated by Amiri Decree. The members of the board hold office for a term of three years. The first board of directors was constituted by Amiri Decree No. (8) of 2000.
Impose stringent controls over securities transactions to ensure sound and conduct procedure.
Develop investment awareness by conduction studies and issuing recommendations in order to ensure that savings are invested in productive sectors.
Ensure financial and economic stability and develop trading methods in order to ensure liquidity and stability of prices of Securities listed on the market. Moreover, ADSM has the authority to establish centers and branches outside the Emirate of Abu Dhabi. To date it has done so in Fujeirah, Ras al Khaimah, Sharjah and Zayed City. The Abu Dhabi Securities Market’s board of directors is comprised of seven members nominated by Amiri Decree. The members of the board hold office for a term of three years. The first board of directors was constituted by Amiri Decree No. (8) of 2000.
The Dubai Multi Commodities Centre (DMCC)
The Dubai Multi Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated 'A' by Standard & Poor's, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones, energy and other commodities industries.
DMCC is also a free zone authority offering 100% business ownership, a guaranteed 50 year tax holiday and freehold property options.Launched in 2002, this strategic government initiative has been established to support the specific needs of its core segments - Gold & Precious Metals, Diamonds & Coloured Stones, Energy and Other Commodities industries.
Sunday 16 March 2008
Commodity market
The commodity market is a market, where commodities are bought and sold. The commodity market differs from a regular market by a specific organizational form of trading according to established rules. The main function of the commodity exchange is assurance of regular communication between buyers and sellers, when transactions are carried out with available batches of goods. The exchange, while developing, started establishing trade customs, commodity standards, standard contracts, performing price quotations, resolving dispute, etc.
Items of international trade now are about 70 types of goods, having 30% of the international commodity turnover. They include metals (precious, base, rare), 'soft products' (coffee, cocoa, sugar, pepper), grain, seeds, livestock, energy sources (gas, raw materials, oil products).
Commodities are not present at the exchange, but sold and bought without presentation and examination. Transactions are concluded on the basis of standard exchange contracts, strictly regulating quality and terms of delivery. At the exchange they sell and buy not certain batches of goods, but stock contracts, specifying amounts of goods of certain sort, type, class, as established by the exchange. The seller at the exchange delivers to the buyer not commodities, but a document, confirming the title to goods. Most of the international exchange turnover takes place at the futures and options exchange, where they trade option and futures contracts.
Trading volume at such exchange has increased by several hundred times due to the fact, that almost all transactions are fictitious (only 1-2% of transactions end up with delivery of goods, all the rest - with payment of price difference). Prices at such exchanges are more volatile in comparison with the stock exchange, and the major risk is associated with the direction of price movement. Quotation fluctuations are mainly caused by speculative actions; that is why it is very difficult to maker forecasts for such markets. Therefore, beginners are not recommended to trade at commodity exchanges.
Items of international trade now are about 70 types of goods, having 30% of the international commodity turnover. They include metals (precious, base, rare), 'soft products' (coffee, cocoa, sugar, pepper), grain, seeds, livestock, energy sources (gas, raw materials, oil products).
Commodities are not present at the exchange, but sold and bought without presentation and examination. Transactions are concluded on the basis of standard exchange contracts, strictly regulating quality and terms of delivery. At the exchange they sell and buy not certain batches of goods, but stock contracts, specifying amounts of goods of certain sort, type, class, as established by the exchange. The seller at the exchange delivers to the buyer not commodities, but a document, confirming the title to goods. Most of the international exchange turnover takes place at the futures and options exchange, where they trade option and futures contracts.
Trading volume at such exchange has increased by several hundred times due to the fact, that almost all transactions are fictitious (only 1-2% of transactions end up with delivery of goods, all the rest - with payment of price difference). Prices at such exchanges are more volatile in comparison with the stock exchange, and the major risk is associated with the direction of price movement. Quotation fluctuations are mainly caused by speculative actions; that is why it is very difficult to maker forecasts for such markets. Therefore, beginners are not recommended to trade at commodity exchanges.
Money market
In finance, the money market is the global financial market for short-term borrowing and lending. It provides short-term liquid funding for the Global financial system. The money market is where short-term obligations such as Treasury bills, commercial paper and bankers’ acceptances are bought and sold.
The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short term financial Instruments commonly called "paper". This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity.
The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short term financial Instruments commonly called "paper". This contrasts with the capital market for longer-term funding, which is supplied by bonds and equity.
Friday 14 March 2008
Wednesday 12 March 2008
Dubai Financial Market Profile
The Dubai Financial Market is a stock exchange located in Dubai, United Arab Emirates. It was founded on March 26, 2000. Almost 40 companies are listed on DFM till June 2006. Most of them are local UAE companies and a few from other Gulf countries with dual listings. Some of the companies allow foreigners to own their shares.
During 2004 and 2005, there were significant increases in the volume of shares traded and the share prices of many companies. However, towdards the end of 2005 and through the first few months of 2006 the bubble has burst and share values dropped by around 60% on DFM, along with similar decreases in most other Gulf stockmarkets.
DFM is one of three stock exchanges in the UAE. Abu Dhabi Securities Market (ADSM) also lists mostly UAE companies and the recently opened Dubai International Financial Exchange (DIFX) was set up to trade international stocks.
During 2004 and 2005, there were significant increases in the volume of shares traded and the share prices of many companies. However, towdards the end of 2005 and through the first few months of 2006 the bubble has burst and share values dropped by around 60% on DFM, along with similar decreases in most other Gulf stockmarkets.
DFM is one of three stock exchanges in the UAE. Abu Dhabi Securities Market (ADSM) also lists mostly UAE companies and the recently opened Dubai International Financial Exchange (DIFX) was set up to trade international stocks.
Dubai Financial Market was established as a public institution. It has its own independent corporate body. DFM is operating as a secondary market for trading of securities issued by public shareholding companies, bonds issued by the Federal Government or any of the Local Governments and public institutions in the country, units of investment funds and any other financial instruments, local or foreign, which are accepted by the Market. The Market commenced operations on 26th March 2000.
Dubai Financial Market has two integrated systems for the daily operations of trading, clearance and settlement. These are Clearance & Settlement System and Trading System.
Clearance & Settlement (CSS) is a universal automated system used to conduct the daily routine business of clearance and settlement. On the other hand, Trading System is an automated system used by the brokers for their daily operations. It also enables both the brokers and investors to monitor spot orders of buy and sell.
The two systems are electronically linked and the completion of a deal on the trading floor simultaneously modifies securities holders’ register in the Clearance & Settlement System with immediate transfer of securities. Investors, thus enjoy integrated and secure service to conduct their buy or sell orders.
All securities of listed issuers are placed in the Clearance & Settlement System, which eliminates the need for the physical exchange of securities certificate and renders the process safer and more efficient.
Here are two basic requirements for the Investors to start trading in DFM:
1) Obtain Investor Number (IN) from DFM after completing "Investor Number Form" at the Investor Services Office or with a DFM accredited broker.
2) Open an account with a DFM accredited broker using "Account Opening Form".
Dubai Financial Market has two integrated systems for the daily operations of trading, clearance and settlement. These are Clearance & Settlement System and Trading System.
Clearance & Settlement (CSS) is a universal automated system used to conduct the daily routine business of clearance and settlement. On the other hand, Trading System is an automated system used by the brokers for their daily operations. It also enables both the brokers and investors to monitor spot orders of buy and sell.
The two systems are electronically linked and the completion of a deal on the trading floor simultaneously modifies securities holders’ register in the Clearance & Settlement System with immediate transfer of securities. Investors, thus enjoy integrated and secure service to conduct their buy or sell orders.
All securities of listed issuers are placed in the Clearance & Settlement System, which eliminates the need for the physical exchange of securities certificate and renders the process safer and more efficient.
Here are two basic requirements for the Investors to start trading in DFM:
1) Obtain Investor Number (IN) from DFM after completing "Investor Number Form" at the Investor Services Office or with a DFM accredited broker.
2) Open an account with a DFM accredited broker using "Account Opening Form".
There a re some documents appended with "Investor Number Form" which have separate requirement for each category i.e., Separate documentation for Individuals category and for the category of Corporate Bodies. Even the Individual category has been divided into UAE nationals and non-UAE nationals.
New investors may fill “Investor Number” and “Account Opening” forms in person in the DFM or through a DFM accredited broker of their choice. The personal appearance of Investor is also made mandatory for opening the account at DFM.
Buying and selling orders can be given to the broker in person, by filling the “Buy / Sell Order Form” or by phone, fax or email based on the investor agreement with the broker. All telephone conversations, which are conducted through DFM telephone lines are recorded and could be used in the event of any dispute between investors and their brokers.
Many options are available and can be utilized in terms of the price limit and validity period.
Brokers process orders of their clients upon their request and securities’ transfer takes place automatically by the clearance system.
New investors may fill “Investor Number” and “Account Opening” forms in person in the DFM or through a DFM accredited broker of their choice. The personal appearance of Investor is also made mandatory for opening the account at DFM.
Buying and selling orders can be given to the broker in person, by filling the “Buy / Sell Order Form” or by phone, fax or email based on the investor agreement with the broker. All telephone conversations, which are conducted through DFM telephone lines are recorded and could be used in the event of any dispute between investors and their brokers.
Many options are available and can be utilized in terms of the price limit and validity period.
Brokers process orders of their clients upon their request and securities’ transfer takes place automatically by the clearance system.
Sunday 9 March 2008
History of UAE Stock Market
In 1997, the first steps toward an official stock market were taken when the Emirates Bank Group established a mutual fund that was open to foreign investment. The fund, Emaar Properties, only covered stocks valued at $178.9 million; however, offers worth almost $920 million were made. This shows that there is a definite interest in a stock market. For the Emaar Properties Mutual Fund, foreign investment was approved; however, only 20 percent of the value of the fund was allocated for foreign investment. Sales to foreigners are suspended when the percentages reach 20 percent. Numerous disagreements exist as to whether or not to allow foreign participation, and the extent thereof, in a fully operational stock market.
The government approved preliminary plans in October 1999 for the establishment of a bourse in Dubai. Then, in December, it was announced that the stock market would use an electronic trading system that would fully disclose amounts of stocks in order to encourage market stability. In early 2000, the DFM officially opened up for trading in securities only. Initially, the Dubai Financial Market will operate as a secondary market for trading of securities issued by public shareholding companies, bonds issued by the local or federal government, public institutions, and financial and investment institutions. From the website on listed companies on the stock exchange it appears that only 12 companies are listed. Currently, it
The government approved preliminary plans in October 1999 for the establishment of a bourse in Dubai. Then, in December, it was announced that the stock market would use an electronic trading system that would fully disclose amounts of stocks in order to encourage market stability. In early 2000, the DFM officially opened up for trading in securities only. Initially, the Dubai Financial Market will operate as a secondary market for trading of securities issued by public shareholding companies, bonds issued by the local or federal government, public institutions, and financial and investment institutions. From the website on listed companies on the stock exchange it appears that only 12 companies are listed. Currently, it
does not appear as though any technology-related firms are traded
Dubai stock market rises sharply
Abu Dhabi: A strong rally in UAE markets yesterday drove the value of listed companies up by more than Dh12 billion, especially in Dubai, where the value of traded shares exceeded Dh3.34 billion. The Dubai Financial Market's (DFM) general index recovered by almost 2.5 per cent to 5,866.83 on account of the strong gains recorded by Emaar Properties, its largest listed company in terms of market capitalisation. The developer recouped 6.61 per cent of its earlier losses to close at Dh12.10, recovering Dh2.57 billion of its market value.
How will UAE stock a market correction impact on the real economy
The UAE stock market seems to have entered a period of sharp correction and has retraced more than a quarter of its value since the end of June. If this textbook adjustment follows the normal pattern, there should be more volatility and a further downward shift, with perhaps a bear-market rally along the way down. But UAE observers with longer memories can be forgiven a sense of déjà-vu. This sudden upsurge in share prices, with shares in Emaar Properties leading the upward charge, is remarkably similar to what happened in 1998. Then, as now, the market was driven to unsustainable valuations by mindless speculators who got burnt when the market headed south. It is interesting to reflect on what happened to the UAE real economy in 1999 and 2000. It is true that one or two projects got cancelled in this period, a $500m theme park for example, but not much else followed. Property rental prices stabilized, but those who were waiting for a crash were disappointed. The recent Nomura report on 'The Great Arabian Bubble' drew a neat comparison with the performance of the Chinese stock market in the early 2000s. The Chinese bourse also hit unrealistic highs and crashed from a peak in August 2000 and has still not recovered today. Yet the real economy in China has boomed in this period. Could the same pattern be repeated in the UAE in particular and GCC in general? With oil trading at record levels above $60 a barrel this is surely the most likely scenario. Even with oil at $10 a barrel in 1998, the UAE still underwent a shallow downturn rather than a recession. Today a stock market crash would have some implications, but it might actually have some benefits too. Some of the projects with more economically-challenged business cases might be cancelled, as the IPOs and rights issues to fund them will now be impossible. This is a sign of capital markets working to protect share values and preventing excessive investment by over-optimistic managements. In a very real sense the market itself is judging what level of investment the UAE economy can handle, and is saying 'hey, hold on a minute guys, isn't this getting a little out of hand?' So could a share price correction in the UAE bourse at this stage actually prove beneficial to the real economy and protective of existing and many planned projects? This might seem another over-optimistic conclusion but it could be the correct one, and the recent experience of China suggests this is likely to be true. The other pertinent question is where does the investment capital go to next, if a stock market correction undermines the stock exchange as a home for spare cash? To take the Chinese example again, real estate is the most likely beneficiary. Shanghai house prices have undergone their own correction this year but have increased several fold since the 2000 stock market correction. Dubai's new commodities exchanges should also benefit as an alternative investment opportunity, and private equity funds. Thus a UAE stock market correction is probably only a serious problem for the individuals who get caught long on falling share prices. Sadly some real hardship for them is bound to follow. But the real economy will roll with the punch and bounce back, particularly if the authorities are clever with liquidity management.
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