DIFC starts to identify losing companies based on Q3 2019 results

Dubai Financial Market (DFM) today announced the implementation of the new procedures approved by the Securities and Commodities Authority (SCA) for listed joint stock companies, which have accumulated losses of 20% or more of its issued capital as of the third quarter 2019 financial results.

The market announced that under these procedures will be added a distinctive mark on the trading screen in the market to each company based on disclosures on the percentage of accumulated losses, so that it is easier for dealers to know the status of each company and take this into account when making investment decisions.

The listed companies, whose interim or annual financial statements show accumulated losses of 20% or more of the capital, must disclose to the market and the Authority in conjunction with the disclosure of these data, explaining the main reasons leading to these losses, and the procedures. That will be taken to address their situation.

The listed company will also have to disclose to the Authority and the market once the accumulated losses reached 50% or more of the capital, specifying the amount of the accumulated losses and their percentage of the capital and the main reasons that led to this level of losses with a detailed plan to address them according to a schedule. Specific, according to the market.

Moreover, the market adds a distinctive yellow mark beside the company name on the price screens indicating that the accumulated losses of the company amounted to 20% to less than 50% of its capital upon the issuance of the disclosure from the company. The market also adds a distinctive red mark beside the company name on the price screen stating that the accumulated losses of the company amounted to 50% or more of its capital upon the issuance of the disclosure from the company.

The market explained that the accumulated losses companies were divided into two categories, the first for companies whose accumulated losses ranges between 20% to 50% of its capital, and the second companies whose accumulated losses exceed 50% of its capital.

Hassan Al Serkal, Chief Operating Officer and Chief Operating Officer of DFM said: “The market provides a fair and transparent trading environment that enables investors to make their decisions in the context of a clear vision on the status of each listed company. This will be through the new procedures that we are pleased to initiate following its formal approval by the Securities and Commodities Authority (SCA) and will implement a wide-ranging induction campaign that includes addressing the listed companies and holding a series of meetings with these companies as well as brokerage firms and investors. Of interest to the new procedures. "