Jan. 11, 2015


HE Essa Kazim

UAE, Dubai

HE Essa Kazim

Governor & Chairman, DIFC, Borse Dubai, DFM

BIO

Essa Kazim is the Governor of Dubai International Financial Centre (DIFC), Chairman of Borse Dubai, and Chairman of Dubai Financial Market (DFM). He began his career as a Senior Analyst at the Research and Statistics Department of the UAE Central Bank in 1988 and then moved to the Dubai Department of Economic Development as Director of Planning and Development in 1993. He was then appointed as Director General of the DFM from 1999 to 20006. He has a Master’s degree in Economics from the University of Iowa, as well as a Master’s in Total Quality Management from the University of Wollongong.

What is the attractiveness of Dubai for dual listings?

A number of foreign companies view Dubai as a platform to attract FDI because our markets are relatively open and we work globally. It is all about ease of access to the market. Many GCC-based companies want to have a dual listing on our market. This is really the purpose. It is actually driven by a strategy formed in consultation with the companies that chose Dubai Financial Market (DFM) as a secondary platform. Currently, the DFM is the listing venue for 12 foreign companies from the region, and some of them are amongst our most actively traded securities.

What other countries are you attracting companies from?

We mainly attract firms from this region for the time being as far as DFM is concerned. Our subsidiary, NASDAQ Dubai, was designed as a platform that the wider region would be attracted to.

What is the impact of these two organizations?

The DFM is mainly focusing on the UAE region and NASDAQ Dubai, which is based in the Dubai International Finance Centre (DIFC), focuses on the wider region. NASDAQ Dubai is our international arm. It caters to the development of the DIFC as a capital market for the wider region and internationally. As the DFM and NASDAQ Dubai are separately governed by two different regulators, potential issuers on Dubai's capital markets have the flexibility of choosing the listing venue that caters to their strategy and preferences when it comes to free float limits, valuations, and so on.

What is the net impact of these exchanges?

The two exchanges are functioning in harmony within one trading platform and liquidity pool. Both of them have been performing well as far as growth is concerned. With its general index up more than 107% in 2013, the DFM was the second best-performing market globally. The same applies also in terms of velocity and liquidity as the DFM's total trading value jumped 229.1% in 2013 to AED159.9 billion and the daily trading average increased 231.8% to AED642.1 million. It is one of the top markets for liquidity. Meanwhile, the FTSE NASDAQ Dubai UAE 20 index has also performed well, rising 87% in 2013. We are experiencing solid internal performance and growth.

What is behind the strength of the banking sector in the UAE?

After the collapse of Lehman Brothers, government policy was highly prudent. It took steps in the financial sector, whether it was the federal government or the Central Bank of the UAE (CBUAE) providing sufficient financing and liquidity requirements for banks. The banks already had sufficient capital adequacy ratios and were maintaining them, but with further support from the CBUAE, and the injection of liquidity, the sector is even more secure. Of course, with the revival of the real estate sector, which was a relatively big exposure, the banks have strengthened their balance sheets and asset portfolios. Over the last five years, banks were really prudent in terms of having sufficient provisions for what would have been expected to be bad loans. They have cleaned their balance sheets and that is why you'll see a solid performance from the banking sector, as in 2013. Most of the banks registered growth of anywhere between 20% and 30% in 2013. I expect that with a revival in the real estate sector, enough provisioning, and the support of the government and central bank, the banks will continue to perform well in the post-global crisis era.

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