Abu Dhabi Securities Exchange

Abu Dhabi Securities Exchange brokers give traders access to the second-largest stock exchange in the Arab region by market cap. It is a hub for trading and investing in public-listed companies alongside access to private joint-stock companies. This guide covers how the Abu Dhabi Securities Exchange works, available markets, listing rules, and the top ADX brokers.

Direct access to ADX is challenging for foreign investors due to regional restrictions and registration requirements. Instead, UK traders can gain exposure to middle eastern markets through ETFs such as the iShares MSCI Qatar Capped ETF (available at Pepperstone) or the JP Morgan EMEA Securities PLC (available at CMC Markets).

Choosing Abu Dhabi Securities Exchange Brokers

There are a limited number of Abu Dhabi Securities Exchange brokers based in the UK. With that said, several brokers in the UAE accept foreign investors with a National Investor Number (NIN). These include Emirates NBD Securities, ADIB Securities, International Securities and EFG Hermes.

Below we cover the major factors to consider when choosing an ADX broker:

Assets

Check for the range of ADX assets available through online brokers, such as stocks and indices.

For example, MENA Corp allows you to trade the FTSE ADX Indices, while BHM Capital Financial Services provides access to the derivatives market.

Fees

Compare brokerage fees such as commissions, spreads and deposit/withdrawal fees. For example, Emirates NDB Securities charges a 0.15% commission on ADX trades.

There may also be account opening fees or a cost to attain your investor number to trade on the ADX. For example, there is an AED 100 fee to open an account with ADIB Securities.

Make sure to factor in any currency conversion fees and exchange rates if you are depositing in local currencies.

Trading Platform

Assess the broker’s platform and determine which tools and features available will suit your trading requirements. Most platforms come with a charting package pre-loaded with technical indicators and drawing tools. Market leaders include MetaTrader 4, although many top brokers also offer a proprietary platform.

It’s also worth looking out for any additional analytical tools, education materials and market news specific to the middle east and Emirati region.

Base Currency

To minimise costs, UK investors should look to deposit in GBP where possible. Some brokers, such as EFG Hermes, allow for GBP to be used as the base currency for their accounts. Trading using GDP will automatically settle through the exchange.

What Is The Abu Dhabi Securities Exchange?

The Abu Dhabi Securities Exchange (ADX) is a stock exchange located in the capital city of the United Arab Emirates, Abu Dhabi. The exchange’s currency is the UAE Dirham (AED).

The ADX facilitates the trading of stocks, bonds, ETFs and other securities approved and regulated by the Securities and Commodities Authority (SCA), a federal authority in the UAE.

In the Arab region, the Abu Dhabi Securities Exchange is the second largest with a market capitalisation of $716 billion. There are 94 listed companies on the exchange, allowing domestic and foreign investors to trade their financial assets.

History

Founded in 2000, the exchange was originally called the Abu Dhabi Securities Market (ADSM). It was rebranded to Abu Dhabi Securities Exchange in 2008, at which point only 13% of ADX-listed shares were owned by foreign investors.

Other notable dates include:

• 2008 – The exchange signs a cooperative agreement with the NYSE Euronext Group to exchange improvements in investing systems, trader services and fresh products
• 2009 – The FTSE promotes the ADX to emerging market status
• 2011 – The S&P and Russell Investments promote the ADX to emerging market status
• 2014 – The Dow Jones and MSCI promotes the ADX to emerging market status
• 2020 – The ADX releases its first sustainability report, committing to adopting sustainable financing in the Emirates and developing positive ESG impacts
• 2021 – The ADX derivatives market is launched, aiming to increase and enhance liquidity and the range of products and services offered by the exchange
• 2022 – The exchange announces an index partnership with FTSE Russell

Markets

The Abu Dhabi Securities Exchange supports 5 markets: main market, growth market, derivative market, debt instruments market, and funds market.

• Main Market: Investors can buy and sell securities from companies offered on the primary market. These companies are all local public joint-stock companies established in the UAE.
• Growth Market: The companies listed on this market are all local private equity companies established in the UAE.
• Derivative Market: Investors can access all the exchange’s derivative products through this market. These include equity futures contracts.
• Debt Instruments: The exchange allows for the trading of debt instruments like sukuks and senior bonds.
• Funds: These are a handful of different Exchange Traded Funds (ETFs) which track the performance of baskets of indices.

Indices

With the FTSE-ADX partnership, there is a range of available indices that track the performance of ADX securities. The FTSE ADX Index Series consists of:

• FTSE ADX General Index: This index consists of all companies listed on the Abu Dhabi Securities Exchange.
• 10 Sector-Specific Indices: Covering consumer discretionary, consumer staples, energy, financial, healthcare, industrials, utilities, basic material, real estate, and telecommunication.
• FTSE ADX Growth Market Index: This tracks the performance of the Abu Dhabi Securities Exchange’s Growth Market segment.

FTSE ADX General Index Chart

Largest Stocks

The top 10 largest stocks by market capitalisation on the Abu Dhabi Securities Exchange are:

1. International Holding Company – AED 874.1 bn (~£192 bn)
2. Abu Dhabi National Energy Company – AED 357.5 bn (~£78.4 bn)
3. ADNOC Gas – AED 234.9 bn (~£51.6 billion)
4. Alpha Dhabi Holding – AED 208.6 bn (~£45.8 billion)
5. Emirates Telecommunications Group – AED 204.2 bn (~£44.8 bn)
6. First Abu Dhabi Bank – AED 146.2 bn (~£32.1 billion)
7. Dubai Electricity And Water Authority – AED 124.5 bn (~£27.3 bn)
8. Emirates NBD Bank – AED 82.1 bn (~£18 bn)
9. Borouge – AED 80.0 bn (~£17.6 bn)
10. Abu Dhabi Commercial Bank – AED 64.3 bn (~£14.1 bn)

Listing Requirements

New issuers must meet several conditions before being listed on the ADX. For example, companies applying for a main market listing must be registered with the Securities and Commodities Authority (SCA) and:

• Have been established for at least 2 years (proven by 2 audited financial statements)
• Have either a paid-up capital of not less than 25 million Dirhams or 35% of the subscribed issued capital, whichever is higher
• Have equal shareholders’ rights for each category of shares

How To Invest On The ADX

To trade on the ADX, foreign and domestic investors must obtain a National Investor Number (NIN).

A NIN can be applied for via:

• The SAHMI app (Emirates ID card holders) with UAE PASS
• ADX registered brokers
• Support offices at branches of the ADX

To apply for a NIN, individual investors will need to submit:

• An original Emirates ID card (UAE residents)
• Passport & ID card for foreigners not based in the Emirates
• International Bank Account Number (IBAN) letter

Note that any documents issued outside the UAE must be authenticated by:

• The UAE embassy in the country where the document was issued
• The Ministry of Foreign Affairs of the UAE
• The Ministry of Foreign Affairs in the country that supplied the document

To trade on the exchange, the investor will need to have an account with an ADX-affiliated broker, such as Emirates NBD Securities or International Securities.

Trading Hours

The Abu Dhabi Securities Exchange is open Monday through Friday from 9:30 am to 3:00 pm Gulf Standard Time (GST / GMT +04:00). The market is open for 5 and a half hours each trading day.

In UK time (GMT), trading hours are Monday to Friday, 5:30 am to 11:00 am.

Note that some Abu Dhabi Securities Exchange brokers may have their own trading hours on their platforms.

Market Holidays

The Abu Dhabi Securities Exchange generally has nine planned market holidays each year. Note that Islamic holiday dates are subject to change.

• Ramadan
• Eid al-Fitr
• Arafat Day
• Eid al-Adha
• Eid al-Adha
• Eid al-Adha
• Islamic New Year
• Mawlid
• Commemoration Day

Bottom Line On The Abu Dhabi Securities Exchange

ADX brokers give investors access to an emerging exchange in one of the world’s fastest-growing financial hubs. Due to the lower foreign interest in the exchange compared with others, access to the exchange is fairly limited. With that said, completing the foreign investor registration process could be worth doing for those interested in diversifying their portfolios.

Alternatively, UK investors can gain exposure to the Middle East through ETFs like the iShares MSCI Qatar Capped ETF (available at Pepperstone) and the JP Morgan EMEA Securities PLC (available at CMC Markets).

FAQ

Article Sources

Abu Dhabi Securities Exchange Website