DIFX – one stock, no trades
Despite much hype and enthusiasm, the DIFX, Dubai’s new international stock exchange, has got off to rather a slow start.
Since the exchange opened for business at the end of September, only one common stock instrument, global depositary shares in Lebanese telecom operator Investcom, has been listed, along with some fixed-income and index instruments.
“The potential is still there, but trading has so far has been slow,” says a Dubai-based fund manager. “The only real IPO has been Investcom, but there’s been so little activity in the stock that I’ve had several clients phone me up to ask if it had been delisted.”
According to Bloomberg, not a single trade has been made in Investcom in Dubai since it launched. The problem, say market participants, is the lack of issues and the fact that local and regional brokers have not yet been able to join in.
“The problem today is that there is only one stock on the exchange,” says a local broker. “At present there are also just a handful of members operating from Europe. As more brokers join and more stocks list things should change for the better. But you need to give these things some time.”
Regional brokers have not been able to participate as soon as international houses because the Dubai International Financial Centre’s regulator, the Dubai Financial Services Authority (DFSA), introduced two types of memberships.