ADX and NBAD collaborate to facilitate listing and trading of Sukuk and bonds

3 days to go Monday 23rd June 2014 ADX and NBAD collaborate to facilitate listing and trading of Sukuk and bonds Daily Cover UAE: Abu Dhabi Securities Exchange (ADX) and the National Bank of Abu Dhabi (NBAD) have contracted an agreement to pave the way for the listing and trading of bonds and new debt instruments on the exchange as their primary platform. The move is a part of the emirate’s initiative to cultivate a more attractive and dynamic climate for investment in Abu Dhabi. Under the listing arrangement for the bonds, NBAD will act as ADX’s account operator. Settlement and clearing will take place via NBAD through ADX’s participant account at Euroclear, which specializes in the settlement of securities transactions as well as the safekeeping and asset servicing of these securities. NBAD’s role will provide a window for investors who wish to trade or hold investments in the bonds, through ADX without holding an account with Euroclear, and will facilitate cross border settlement and clearing of trades in the bonds. According to Rashed Al Balooshi, CEO of ADX, the initiative is also a means of attracting investment into Abu Dhabi through the exchange. “We have all the modern infrastructure and procedures to support such new investment, whether it is denominated in UAE dirhams or in foreign currencies. Longer term, local fixed income and Sukuk issuances will encourage more infrastructure funding and attract institutional capital flows, as well as the creation of a local yield curve.” The signing of the agreement comes in accordance with ADX strategic objectives of diversification of products and to a bond market operating under the best standards. “The new regulations introduced by the Emirati Securities and Commodities Authority are an important step in this process and remove yet another reason for companies and institutions to look elsewhere for raising capital,” Rashed added. Echoing the same sentiments, Hany Samir, managing director of NBAD’s Custody highlighted that the ability of ADX to list such instruments will encourage and increase UAE fixed income issuances, in addition to enhancing the depth and variety of options for investors. ADX currently has one bond listed, which is by NBAD in the form of subordinated convertible notes. 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