‘In First Half Of 2020, 18,000 Indians In UAE Traded Shares Worth Rs 3.5 Billion’

H.E. Khalifa Salem Al Mansouri is the Chief Executive of the Abu Dhabi Securities Exchange (ADX). Under his leadership ADX has seen a rapid acceleration in access for foreign investors. In the first half of 2020, AED 6.3 billion of additional stock became accessible for a new group of both local and international investors, creating further scope for increased trading and liquidity. Recently, ADX has published its inaugural 'Environmental, Social & Governance (ESG)' Report, the first exchange in the region to do so.

In an interaction with Outlook,  H.E. Khaleefa Al Mansouri shares his views on current global markets, the Indian investors who have invested in ADX, strategic partnership between ADX and Bombay Stock Exchange. Excerpts:

Please share your views on the current global market scenario.

There is considerable volatility across all markets and across all types of investment: bonds, equities, derivatives, commodities, and others. This is likely to remain the case while uncertainty about how long the global economy and its component parts will continue to be affected by Covid-19. Some economies will recover faster than others, depending on the success of the measures they have implemented to reduce the impact of the virus.

The underlying long-term strength, diversity and sustainability of Abu Dhabi’s economy and the steps our wise leadership has taken to combat Covid-19 suggests that as a market, we are well placed, but we can take nothing for granted. However, at ADX, we are working hard to ensure that investors who share our optimism can take advantage, increasing the range of products, investing in our digital infrastructure, and offering greater access to a broader range of investors.

You have recently shared your opinion on the need for more integration amongst emerging markets and we also read about rapid acceleration in access for foreign investors at ADX. What impact will such integration create in the global market?  

It can only be positive. If more investors are spreading their risk across a greater number of exchanges, then everybody benefits, not just ADX. It creates confidence, which is always a valuable commodity, but is especially true at this point in time. Confidence breeds growth, and growth breeds more confidence, which creates a better environment for the world’s leaders to return to the task of promoting global trade.

How did ADX react to the Covid-19 pandemic? How important is digital transformation as we adapt to the new normal?

We provided our e-voting system to our listed companies free of charge, to enable their AGMs to take place remotely, enabling all meetings to be conducted seamlessly and effectively. We originally introduced this product back in 2015, when it was the first of its kind in the region and the third in the world to deploy blockchain technology, but it has clearly been highly practical during COVID-19.

I should also mention our SAHMI integrated digital platform, which was first unveiled in 2018, and has been continuously updated since then to meet the needs of new technology advancements. It was of particular importance during COVID-19, as it provides an integrated system that enables investors to manage their everyday transactions via their mobile devices, thereby reducing human interaction.

Do you have Indian investors trading in ADX? Please share a demography of Indian investors. How do you plan to attract more Indian entities and investors to trade in ADX?

Approximately 18,000 Indian residents are currently invested in ADX-listed companies, with total investments worth approximately AED200 million. In the first half of 2020, they traded 100 million shares with a trading value of AED172 million (INR3.5 billion). We don’t break down our investors by particular territories within their country of citizenship.

In terms of attracting new investors more generally, we will be launching a range of new initiatives. We are making the listing process simpler, leading to more companies listing, which we would hope could include both businesses based in India, and businesses founded in the UAE by Indian entrepreneurs. We are also creating the scope for new products: only this month we saw an ETF listed on ADX, in the form of Chimera, the first of its kind in the UAE), and we expect others, such as REITs and green bonds; and we are looking at expanding the range of platforms available to investors (for example short selling and stock lending). All of these will increase the range of options available to investors and enable them to manage their risk more effectively.

What are your plans on integration or collaboration with Indian counterparts like the National Stock Exchange or the Bombay Stock Exchange? What will it mean for Indian investors?

We are continually striving to forge strategic partnerships to attract more foreign investment to the ADX and to Abu Dhabi. To that end, ADX has an MOU signed with Bombay Stock Exchange (BSE) which is in line with our strategy to bolster our international presence, as well as strengthen continued efforts to benefit from global best practices.

Through the MOU, we have formed a joint working group with the BSE to promote cooperation between the two stock exchanges in several key areas, including benefiting from the expertise of the BSE in supporting small and medium enterprises and the steps it has taken to effectively manage related projects and procedures. 

We were keen to highlight to Indian investors the unique investment opportunities of ADX that are available, both in terms of political and economic stability, its fair legislative and legal system, as well as advanced infrastructure. These are all factors that attract investors looking for stable markets and sustainable returns.

ADX has recently launched a launched an Environmental, Social & Governance (ESG) Report. Please share key takeaways of the report.

Sustainable finance has become an increasingly important consideration worldwide. In the United Arab Emirates, sustainability is now ranked as a critical success factor for companies to ensure long-term value creation. Investor considerations are no longer just about returns but now incorporate sustainability as part of their investment strategies. By raising awareness and understanding of Sustainability Reporting and therefore encouraging the listed companies to follow ADX guidelines when issuing their own report, our ambition is to raise the level of knowledge in Sustainability Reporting and enhance its quality.