Dubai Stock Exchange

All you need to know about the Dubai Stock Exchange

Finance

The Dubai Stock Exchange (DSE) was established in 1999 and is the leading stock market in the Arab world. 

The DSE has grown to become one of the largest markets globally, closing 2015 with a valuation of $150 billion, up from around $100 billion during its inception.

The growth in Dubai

This growth has been attributed to many factors, one of them being Dubai’s strict adherence to Islamic banking principles, which encourages transparency and accountability, particularly when it comes to business accounts and transactions. 

Transparency and reliability are crucial for attracting international investors and customers, contributing significantly to the UAE economy. 

The country also has no income tax making it an attractive option for foreign investors and expats who want financial security but don’t want taxes compromising it. 

In fact, according to a recent Global Finance Magazine report, the UAE was ranked number 2 in the world when it comes to GDP per capita growth from 2013-2014.

Where does the wealth come from

Most of this wealth comes from the UAE’s oil and gas industry but has grown tremendously over the past few years due to a large influx of international businesses looking for a better market. Dubai boasts an impressive skyline containing over 900 completed highrises alone.

It is also home to some of the largest malls in the world, such as The Dubai Mall, which houses over 1,200 retailers making it one of the most profitable malls in existence.

Dubai Financial Services Authority 

The DSE is regulated by the Dubai Financial Services Authority (DFSA), which among its functions, provides a framework for companies to list and operate exchanges by international best practices. 

The DFSA also helps promote transparency and liquidity within the market and protects investors from fraudulent activity, all of which contribute to making it one of the safest stock exchanges globally.

Boosting the Economy

To further boost their economy, enforce trading standards and attract more foreign investors, Dubai has been taking many steps to make access easier for those looking to invest. 

In December 2015, they announced that investors would open a trading account even if they don’t reside in the UAE through a partnership with the global investment platform eToro.

This is a big step forward as it eliminates some of the barriers preventing people from investing in Dubai.

The Two Markets in Dubai

The DSE comprises two markets, the Main Market and the Alternative Market. The Main Market is for more extensive and more established companies, while the Alternative Market is for smaller and startup companies. 

To list on either market, companies must meet specific listing requirements reviewed and updated periodically by the DFSA.

All publicly-traded companies in Dubai must file financial reports with the DFSA, then make them available to the public. This allows investors to make informed decisions regarding their investment portfolio. 

The DSE offers a variety of tradable products, including stocks, bonds, Sukuk (Islamic bonds), ETFs, index funds and more. Most of these are available for investors to purchase online through their trading account.

The DSE maintains price stability by following international market best practices. The system also allows companies to make amendments to the balance sheet. 

If an investor wishes to trade in US Dollars or Euros, they can do so with complete ease via a partnership between the DSE and foreign currency specialist Xpress Money.

There are no restrictions on how much money you can send nor where it can be used. This makes it extremely easy for traders who want to get started right away without having to wait for wire transfers or similar services that may take days or even weeks (based on bank policy)

Free Tools and Resources

There is a wide range of free tools and resources available to traders and investors on the DSE, including: 

  • An Economic Calendar which lists upcoming events that may affect market prices 
  • A Market Depth tool that helps investors identify the best price to purchase or sell an asset 
  • Stock Leaders which provides live news updates on some of the most traded companies on the DSE 
  • Sector Leaders, similar to Stock Leaders but for companies within specific industries or sectors. Multiple comparison charts can be used for quick analysis such as 52-week high/low, last one-year performance, EPS growth rate etc. These are just some examples of what is currently available with a more expected future.

Contact a Dubai stock broker to start trading.

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