The History of Dubai Financial Market

A brief historical background

The Dubai Financial Market was founded on March 26, 2006, and since then it has attracted approximately 61 companies in Listing as of the year 2012 (Tradearabia.com, 2013). Most of the companies listed on the DFM are based in the UAE although other regions are also represented. However, all the foreign companies listed on the DFM are Arab countries although some of these companies allow foreigners from other regions to own shares (Tradearabia.com, 2013). DFM is one of the major stock exchange markets in the UAE and is governed and regulated by the Securities and Commodities Authorities (Tradearabia.com, 2013). In the region, the Securities and Commodities Authority is the only recognized institution that can create financial market laws, which the DFM is obliged to respect.

The government previously owned the Dubai Financial Market but it was later turned into a public joint share company (Tradearabia.com, 2013). This was done through an Initial Public Offer in 2006, which saw a transfer of 20% shares to the public although the government controls the remaining 80% through Borse Dubai (Tradearabia.com, 2013). Sadly, the DFM has not been taking a progressive turn in terms of financial stability especially looking at its financial trend from 2006. It has made losses from 2007 to 2012 a factor that has greatly comprised its market viability. Consequently, the board of directors, managers, and other employees are running away from DFM due to the uncertainty in its sustainability.

Launching the Investor Relations program

To save the deteriorating financial market, DFM launched a university program that would address the issue. The IR graduate program is the pioneer Investor Relations program that focuses on emirates students (Tradearabia.com, 2013). The IR program is increasingly gaining momentum due to the projected growth in Dubai in terms of investments and expanded markets. Before, the market was made up of local investors but the situation has abhorrently changed (Tradearabia.com, 2013). The market has grown and opened up even for international participation, as Dubai is becoming a country of great interest internationally.

The development of this program gives the students a unique opportunity to gain from the rising demand for Investor Relations. The field is very new to the UAE market but it is arguably one of the fastest-growing in the market (Tradearabia.com, 2013). This is important especially with the current state of the DFM where investor confidence is very low. The listed companies in the DFM will therefore require Investor Relations skills to hold them back. Most investors are scared of DFM’s financial vulnerability. Being the first of its kind in the market, the program is expected to boost the investor base in the DFM and help address the issues of investor safety.

Dubai is viewed worldwide as a center of activities hence the growing investor interest in the region (Tradearabia.com, 2013). Many people and global companies are expressing their interest in venturing into the UAE market, hence the need for an IR human resource base to assist in such matters. The launch of this program comes as good news to university students as well as the management in the DFM. The skills in Investor relations are very crucial in steering the financial strength in the country. DFM is therefore delighted to participate in the creation of the new profession that will see their financial vulnerability being reduced significantly (Tradearabia.com, 2013).

Mobile trading in the DFM

Investors in the DFM are increasingly using mobile technology, which has greatly influenced the growth and popularity of the mobile trading platform. The rising need for simpler ways of trading shares has greatly influenced this paradigm shift in the DFM. Brokerage firms are the greatest users of the mobile trade and through agreements with the DFM, mobile trade has become a reality. Currently, only two firms exploit this market but it is reported that plans are underway with other firms to unveil the same applications to allow mobile trading (Mesbah, 2013). Preparations are ongoing to make it easier for buyers and sellers to trade their shares through mobile platforms. The DFM also has actively been in support of this transition to mobile trading. The DFM has shown its support by providing very sophisticated infrastructure that can support mobile trading (Mesbah, 2013).

The DMF believes in providing investors with innovative tools that will ultimately increase the trading of shares. Simplifying the trading of shares reduces the time spent in visiting the DFM or brokers hence enhancing trade (Mesbah, 2013). Some of the things that the DFM has done include offering information on their website where customers can freely log in and check the trends of sales. DMF has been supporting its brokers in their efforts to make trading in the financial market very proficient and flexible (Mesbah, 2013). Ultimately, it suffices to say that the trading system in the DFM is on a transformational stage and positive results can be anticipated. The choice of integrating the money market with the current technology is very well-intended. This is the best way to make an impact in the Dubai Financial Market.

References

Mesbah, R. (2013). Mobile trading increasingly gains momentum amongst DFM investors. Web.

Tradearabia.com: DFM launches first IR graduate program. (2013). Web.