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Dubai: The Dubai Government yesterday announced the setting up of a holding company, Borse Dubai, targeted at consolidating Dubai Government's holding in the two stock exchanges, Dubai Financial Market (DFM) and Dubai International Financial Exchange (DIFX).
"The creation of the holding company will not alter the legal status of both the exchanges as DIFX and DFM will continue to be regulated by Dubai Financial Services Authority (DFSA) and the Emirates Securities and Commodities Authority (Esca) respectively," Dubai Government said in a statement yesterday.
Borse Dubai plans to build on existing synergies between both exchanges, with improved infrastructure for both exchanges. Explaining the role of Borse Dubai within the new structure, DFM Chairman Eisa Kazim, who has been appointed as the Chairman of Borse Dubai, said that the company is intended to be a facilitator, allowing DIFX and DFM to explore joint opportunities for the development of capital markets in the region and in the broader context of global exchanges.
"Both exchanges will share best practices, maintaining operational efficiency at international standards. Borse Dubai will boost confidence among issuers, investors, and intermediaries who will benefit from a presence in both exchanges, as well as a broader and more varied range of services," sadi Kazim.
In the context DIFC's plans to acquire stakes foreign exchanges, the formation of Borse Dubai is expected to form a common platform for both Dubai based stock exchanges to expand internationally. Last year DIFC built up a 3.5 per cent stake in Euronext, the European exchanges operator now owned by the NYSE.
Earlier this year DIFC, through its investment arm DIFC Investments acquired 2.2 per cent stake worth $1.8 billion in Deutsche Bank.
Last month Razi-ur-Rahman Khan, chairman of the Securities and Exchange Commission of Pakistan, said that a Dubai company had shown interest in buying a minority stake in Karachi Stock Exchange. During the past few weeks there have been speculation in the international press that DIFC is targeting a controlling stake in OMX, a Nordic stock exchange.
The new holding company is expected to create new opportunities within the region as well as a bridge between East and West.
"Dubai 2015 plan seeks to position our Emirate as a global hub of a diversified economy. Naturally, a mature and well-structured financial industry is instrumental for sustainable and rapid growth of such an economy. Borse Dubai is the answer and the right vehicle for this," said Dr. Omar Bin Sulaiman, Governor of Dubai International Financial Centre (DIFC).
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