DFM net profit plunges to $2.17m
Dubai, February 26, 2012
Dubai Financial Market (DFM), one of Arab world's leading bourses, said its full-year net profit for 2011 dropped to Dh8 million ($2.17 million) from Dh89.9 million net profit the previous year.
The DFM group (including its subsidiary Nasdaq Dubai) recorded a net loss of Dh6.9 million compared to a net profit of Dh78.9 million in 2010, said a statement from the Dubai bourse operator.
The total revenues reached Dh176.5 million at the end of 2011, down from Dh260.5 million the year before. The total revenue comprised Dh119.6 million operational revenues and Dh56.9 million of investment revenues and others, the statement added.
Acording to DFM, its trade value has considerably overshadowed the revenues, with a 54 per cent decline in 2011. However, the financial results for 2011 indicate that new revenue streams have initially started to contribute to the total revenue in an encouraging way, it added.
Announcing the results, Abdul Jalil Yousef Darwish, the chairman said: 'In 2011, DFM has made great strides in implementing the strategy adopted by the board upon its election in 2010, through several initiatives aimed at improving DFM’s performance, efficiency and trading activity.'
The ultimate goal of this strategy, he stated, was to maximize the shareholders’ value by diversifying revenue streams through optimally monetizing the company’s services and resources.
'Consequently, we have signed agreements with 20 companies in 2011 to sell market data. Additionally, we expanded our cash dividend distribution services to manage this process on behalf of 6 public companies through iVESTOR cards, cheques and bank transfer,' he noted.
Other sources of income included listing fees and online advertising opportunities on DFM website, he added.
Accordingly, the company’s total revenues from these new sources amounted to Dh4.7 million in 2011, which is 2.8 per cent of the total revenue.
Commenting on the results, Essa Kazim, the managing director and CEO said, “During 2011, DFM was not isolated from international markets which were negatively affected by unfavorable global developments, particularly the aggravating European Sovereign Debt Crisis, the low confidence in the global economic recovery and the concerns about another global crisis more severe than its predecessor.'
'Despite this situation, our development efforts have progressed at an increasingly fast pace over the last couple of years, with the aim of aligning DFM’s regulatory structure with international best practices and meeting the growing needs of market participants,' he remarked.
According to him, the DFM undertook 18 different development initiatives; most of which have been already implemented.
'The successful adoption of the “Delivery Versus Payment” mechanism is undeniably the most significant of DFM’s development efforts in 2011,' he added.
These initiatives are just a small part of the ongoing improvement and development plans to be implemented in co-ordination with the Securities and Commodities Authority (SCA), said Kazim.
'The plans include short selling, market maker, trading covered warrants, trading rights issues, stock swap agreements, Direct Market Access Mechanism, and the implementation of XBRL, the data preparation analysis and publishing system.'
'We believe that these enhancements lay the foundation for a new era of sustainable growth,.' he added.-TradeArabia News Service