GROWING AMBITION

Abu Dhabi 2019 | FINANCE | INTERVIEW

TBY talks to Rashed A. Al Blooshi, Chief Executive of Abu Dhabi Securities Exchange (ADX), on highlighting the opportunities available to companies on ADX, adopting best practices in the field, and further developing the market.

Rashed A. Al Blooshi
BIOGRAPHY
Rashed A. Al Blooshi joined ADX in April 2000 and played an instrumental role in establishing the exchange in November of that year. Al Blooshi started his career with ADX as manager of the clearing, settlement, depositary, and registry (CSD) department. In 2007, he became deputy chief executive and manager of operations of ADX. He was promoted to Chief Executive in 2012. Earlier, Al Balooshi was head of the registrar and depository at the Sadiyat Free Zone Authority. He holds an MBA from the UAE University and a bachelor’s of science from Benedict College, South Carolina.

What further financial instruments does ADX plan to add to further grow the sophistication of Abu Dhabi's capital market?

The first objective is to increase liquidity, while the second part is market capitalization, as there is still room to expand and add more IPOs, especially with local private companies. There is another area for SMEs, and we seek to make it easier for them to finance, export, expand, and create even better platforms. We have a plan to introduce other financial instruments into our market as well as develop other products. Bonds are another alternative that we are working on with issuers to have on the trading floor. At the basic diversification level, we are in talks with potential companies in education, healthcare, retail, and petrochemical sectors to add more diversity into the exchange that would produce more opportunities for our investors. Our role is to highlight the opportunities available on ADX to those companies.

Extremely large players are recently getting more involved with capital markets. What does this mean for the finance sector?

It means growth and expansion and the potential to be significantly more active. It is all about IPOs that make the companies more efficient and transparent. In a nutshell, it introduces better governance. This activity shows that the economy is growing, and the maturity of the management of these companies has reached a level where going public is feasible. The board members are eager to take on these opportunities so that they can develop their entities. Once the wheels are in motion, we will witness radical changes in the financial sector. On the regulatory side, ADX has adopted the best practices in the field. There is also the technological aspect, along with a great level of depth; at ADX, we have around 966,000 investors, 40% of them foreign. We also have more than 7,900 institutional investors, of which 5,900 are foreign institutional investors, and more than 350 are pension funds from all over the world. All of the top-25 asset management companies are registered on the exchange and actively trading. In 2018, our listed companies paid cash dividends of over AED23.4 billion.

What is the key for investors to allocate funds on equities, changing and unlocking the potential in the MENA market?

In the UAE, in general, there are a variety of ways to transfer funds to and from multiple entities without obstacles. Our case will be the same because we have many high-net-worth individuals, many of which are almost as large as institutions. We have many units here, and using REITs would be a great way to get people involved in owning pieces of various properties.

What is ADX's relationship with the Abu Dhabi Global Market (ADGM), and how will that relationship evolve moving forward?

If there is any reason we cannot develop a financial instrument in the UAE, we now have ADGM as an option to reach out to and further develop the market. For example, in terms of fintech it has positioned itself as a specialist. ADX will become part of the fintech movement, so now we have a “fintech club" where we can further develop technical ideas to be introduced.

What are the risks for capital markets in the UAE and region?

We are currently part of the Morgan Stanley Capital International (MSCI) emerging markets (EM) index and, thus, face the same risks as other financial markets around the world. There is taxation, shifting of investments, and clustering, all of which result in rapid and radical changes. All the global economies are challenging themselves and competing against each other. This makes the market a constantly improving place and the UAE attractive and unique for most investors. We do not focus on our past achievements, because we know there is more to be done.