The Dubai Financial Market and Abu Dhabi Securities Exchange merger back on the cards (BY IFN)

The Dubai Financial Market and Abu Dhabi Securities Exchange merger back on the cards

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UAE: Merger talks between the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) are said to have been revived after a spate of dormancy since 2010. The move, which could spur a deepening of the equity market of what is touted to be the Middle East’s second largest economy, is reported to be pending the decision of the highest authorities in both the emirates. According to sources, the structuring of the deal and its valuation have been concluded, and it is just a matter of time before the merger occurs; reported a Gulf daily. The DFM is currently owned by Borse Dubai, which has an 80% stake in the company. It is likely, sources say, that the merger will see the Abu Dhabi and Dubai government owning 45% apiece of the merged entity, while the remaining 10% will be owned by minority shareholders. Dubai and Abu Dhabi have had a longstanding cooperation, with Abu Dhabi displaying its largesse towards the emirate in the form of a US$20 billion loan following the 2009 Dubai financial debacle. Last week, the MSCI UAE Index was lifted to Emerging Market status by Morgan Stanley Capital International, an upgrade which is expected to attract volumes of institutional portfolio investments into the emirate. Both indexes have also exhibited bullish performance in the last quarter, with the DFM General Index up by 41.9% and the ADX General Index up by 36.4%.