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Delegates at the summit

Exchange traded funds to play vital role in Mena

MANAMA, April 23, 2015

Globalisation for Middle East and North Africa (Mena) securities exchanges is now about putting down roots at home as opposed to global mergers, experts concur.

Capital markets experts who have come together at the Arab Federation of Exchanges (AFE) Equities Summit 2015, also agreed that initial public offerings (IPOs) that were the name of the game earlier, have lost their pride of place to exchange traded funds (ETFs), which are the new market reality now, said a report in the Gulf Daily News (GDN), our sister publication.

Another major takeaway is that technology for Mena exchanges was focused on equity and now empowers a whole range of products.

Key officials of 18 Arab stock exchanges have joined representatives of financial market regulatory bodies, brokerage firms and investment fund managers for two-day-long discussions to address the global trends impacting exchanges, foreign investments in Arab exchanges, reforms and regulations, upgrading trading platforms, and family companies.

Hosted by the Bahrain Bourse, the conference is a joint activity of Thomson Reuters and the AFE.

Thomson Reuters Mena general manager of financials and risk Samer Habbal said a poll of around 15 leading regional investment managers in March reveals that funds are positive on many Mena stock markets despite the recent slide in oil prices.

“According to the survey, Middle East fund managers may move further into cash as economic risk in the region rise,” he said.

“However, 13 per cent still expect to raise their equity allocations to the Middle East in the next three months and 7pc expect to raise fixed income allocations to the Mena region,” Habbal added.

“After a drought of five years, we are finally seeing positive signs of a pick-up in IPOs throughout Mena.

“This will eventually contribute to deepening the markets and attracting fresh investor interest.”

Nasdaq vice-chairman Meyer Sandy Frucher highlighted the significance of technology as a key element for the future development of capital markets.

“Business is becoming globalised and regulators have to strengthen themselves by offering unique products and influencing investors in order to achieve growth and creativity across capital markets.

“We also need to lift the level of information available to regulators and facilitate regulator education,” he added.

S&P Dow Jones Indices managing director Robert Shakotko said the infrastructure needed for trading ETFs should be in place and investor education is now a must.

Borsa Istanbul vice-president Hüseyin Zafer said the exchange is trying to present itself as an intellectual market for businesses.

Euronext head of market solutions Nick Thornton said exchanges currently have a different perspective of globalisation. - TradeArabia News Service

Tags: Mena | fund | Trade | exchange |

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