Provides more transparency and supports portfolio management for institutional investors
Abu Dhabi Securities Exchange adopts the FTSE Russell standard for classifying sectors
The Abu Dhabi Securities Exchange announced the start of adopting the FTSE Russell benchmark system for classifying sectors for all its listed shares, as part of the comprehensive market strategy aimed at adopting the most important global standards and attracting more international investors.
Standard Objectives
A statement stated that the adoption of the reference standard for classification of sectors comes within the framework of the transfer of the current sectoral indices in the Abu Dhabi Stock Exchange, to the series of "FTSE Abu Dhabi Securities Exchange" co-branded indices, under a strategic partnership between the market and "FTSE Russell".
The Abu Dhabi Securities Exchange seeks, through the reference standard for classification of sectors, to provide more transparency, enable and enhance the accuracy of stock research, support the management of institutional investors' portfolios, and enhance asset allocation strategies.
international standards
Saeed Hamad Al Dhaheri, Managing Director and CEO of Abu Dhabi Securities Exchange, said: “Adopting the Sector Reference Standard System, and our partnership with FTSE Russell, are among the cornerstones of our comprehensive strategy (ADX One), which confirms our commitment to adopting the best international standards in our market.”
He added: “The reference standard for classification of sectors will support the new indicators that we are developing in cooperation with (FTSE Russell), which will encourage the inclusion of index-based products in the market, as well as highlighting the unique investment opportunities provided by the market, enabling it to attract more investment flows from institutions.
market transparency
In turn, CEO of FTSE Russell, Arne Stahl, said that the Abu Dhabi Stock Exchange's adoption of the reference standard for classifying sectors will support market transparency and standards, to meet the requirements of the global investment industry, stressing that this step will increase international awareness of investment opportunities in the capital markets. Money in the UAE.
FTSE Russell standard
It is noteworthy that the FTSE Russell Reference Standard System for Classification of Sectors is a strict and transparent methodology based on a set of basic rules for classifying companies within their sectors, and depends mainly on the nature of the company's work, and is determined by its primary source of revenue.
The FTSE Russell benchmark system classifies companies and securities into four levels.
ADX One strategy
The success of ADX One's strategy to boost listings and introduce more innovative products and services has resulted in a more than fivefold increase in trading values in 2021.
The trading value (buying and selling) that the market witnessed between 2020 and 2021 increased by 407%, rising from 145 billion dirhams to 739 billion dirhams, driven by the increasing demand of local and international investors.
The increased demand witnessed by the Abu Dhabi Securities Exchange helped raise its general index by 64%, making it one of the best performing stock indices in the world during 2021.
Meanwhile, the market value of shares listed on the Abu Dhabi Securities Exchange more than doubled, reaching a record level of more than 1.6 trillion dirhams.
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