Hi everyone, this is as much of a learning post for me as it is a research one, so i'd be grateful if you could contribute both knowledge and insight.
I’ve been into financial markets for over a decade now, and admit my interest has been mostly limited to US markets.
A few months ago, I read something online that made me realize an interesting thing has been happening in the Middle East over the last few years. And no… I’m not talking about wars, oil or political revolutions (PRAYING FOR PEACE BTW!!)
I am talking about financial markets, exchanges to be more precise. Many places, even within the Middle East, have one, so what’s special? Well, I think the difference is not just in the aspirations and goals, which are on a whole other level, but in the capacity to implement necessary and constructive changes, as well.
While exchanges like ADX in Abu-Dhabi, or DFM in Dubai (fierce competitors of each other btw) were founded in 2000, recent years have shown they aspire to become truly international hubs of trade, not simply local markets.
Their central geographic location, deep history of commerce, and the presumably vast resources that can be devoted to the task make them a point of interest.
When the ADX aligned their trading schedule with that of Western exchanges instead of the local standard I knew they meant business. This change might seem insignificant, but for an exchange operating in a Muslim country to be operating Monday-Friday is a pretty big deal. Moreover, these exchanges are growing year to year.
For example, the foreign investments in ADX are steadily increasing (seen numbers from 17-30% atm), market capitalization of over $700 billion, and very decent volumes of trade (roughly a quarter of the DJI on average) makes them increasingly relevant. Add to that a recent partnership with BNY Melon, fascinating features like the “Growth Market” (basically a venue for private companies to raise money against 5% or more of the equity, a novelty for me!), and pretty good market making as I’ve heard, and this relevancy increases further.
Having said all that, I have to say that from a western retail perspective these exchanges are not as inviting as I think they should, and can, be. This is a bit strange when considering the aforementioned efforts, don’t you think? From the lack of familiar brokers, or that of a thriving futures and options market, to the unclear platform accessibility, there are outstanding facilitation issues.
In conclusion, while there are important puzzle pieces still missing, one cannot and should not ignore the serious efforts being made there.
Have any of you looked into this subject? Do you know of other regions showing similar promise and efforts? What do you all think would make such exchanges competitive and inviting for retail traders? I’d love if you could share your findings and impressions with me, and appreciate your time and input.
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