The Securities and Commodities Authority held a meeting with the Abu Dhabi Stock Exchange and Dubai Financial Market, to discuss the state of the financial market in the country, study the situation closely, contain the implications of the decline in indicators in the markets, and take urgent measures to deal with this decline.
The meeting was chaired by the Authority’s CEO, Dr. Obaid Saif Al-Zaabi, and was attended by a number of the Authority’s advisors, and representatives of the directors of technical departments in it. The meeting was also attended by the Executive Vice President of the Abu Dhabi Stock Exchange, Ghanem Al-Dhahri, and the Deputy Chief of Operations from the Dubai Financial Market, Khalifa Rabba, In addition to a number of technicians and legal from the two markets.
The attendance of the authority and the financial market during the meeting stressed the strength of the fundamentals of the state economy, its solidity and immunity, from the reality of positive macroeconomic indicators, and pointed to the success of the local public joint-stock companies listed in achieving good profits from last year, and the growth rate of net profits increased to 9%, compared with Net profit in the previous year. They also noted the mechanisms developed by the authority, in cooperation with the markets, to contain the negative results of some companies, whether related to the merger of the losing company with another company or companies, the acquisition of existing companies, as well as the entry of strategic partners, the conversion of cash debt into shares in the capital of the company, and the issuance of bonds Convertible to shares, excluding the priority right of the company's shareholders. They also praised the mechanism established by the Authority at the end of last year regarding the procedures for companies listed on the market, whose accumulated losses amounted to 20% or more of its capital.
The attendees also discussed several other measures that would contribute to supporting the factors of balance between buying and selling, and they clarified that the uncovered short selling mechanism that helps in the drop in global markets and is prevented by regulatory bodies in times of crisis is not activated in the state markets. Also, the financial markets are currently studying the possibility and feasibility of reducing the margin of maintenance on margin trading in accordance with international practices in this regard.
The meeting also pointed out that statistical studies and benchmarked comparisons showed that the country's markets have low correlation with financial markets that suffer an unjustified decline crisis.
At the same time, the authority is currently activating the powers granted to it to facilitate companies' buy-backs of their shares in accordance with international practices in effect at the time of declining markets, and the authority is also in contact with the central bank to consider the mechanisms for banks to liquidate shares used as collateral when prices fall.
In addition to the above, the authority works closely with listed markets and companies to fully operationalize to ensure the continuity of holding associations through various electronic means, such as electronic voting, and sending invitations by e-mail and text messages.
• 9% the growth rate of net profits for local public shareholding companies during the past year.
• Study the possibility and feasibility of reducing maintenance margin on margin trading in accordance with international practices.