ADX unveils new 'future proof' market infrastructure
Abu Dhabi Exchange (ADX) is launching new market infrastructure that will introduce more diverse product offerings to attract retail investors as the emirate seeks to boost its capital markets.
The "New ADX Group" business model and its two subsidiaries announced on Monday will introduce new post-trade capabilities and services to allow clearing and settlement platforms to operate at a faster rate, encouraging a wider group of investors to participate. The post-trade divisions performing these functions under the model are Abu Dhabi Clear (AD Clear) and Abu Dhabi Depository (AD CSD), aimed at boosting market efficiency to facilitate a greater inflow of capital.
The two subsidiaries will do so by integrating multiple asset classes such as equities, exchange traded funds (ETFs), derivatives and debt instruments on to a single platform. Algorithms for high-frequency trading (HFT) will be updated for greater optimisation in addition to the introduction of new and more sophisticated order types for greater trading flexibility.
"The ADX Group's new business model aims to transform and future-proof its thriving capital market," ADX said in a statement. The new trading system aims to unlock more investment opportunities and deepen market liquidity by providing investors and industry participants with greater and faster access to market activities and growth sectors in Abu Dhabi, it added.
ADX, with a market capitalisation of about $808 billion as of Monday, is the second largest exchange in the Arab World after Saudi Arabia's Tadawul. It ranked as the seventh largest globally for emerging market exchanges last year.
It has recorded a surge in initial public offerings in recent years driven by robust investor demand for new issues as well as economic growth in the UAE. The bourse accounted for 27 per cent of IPO proceeds from the Middle East in 2024. In the last five years, ADX has outperformed the MSCI Emerging markets Index with its general index increasing 86 per cent over that period of time, according to the exchange.
Total trading value last year reached Dh342 billion, a 7 per cent annual increase, while net foreign investment rose to Dh24 billion, the ADX said this month. Foreign investors accounted for nearly 40 per cent of total trading activity, while institutional investors contributed to 80 per cent of the total trade value, the exchange said.
Last week, social trading and investing platform eToro added over 30 companies listed on ADX to its platform after an agreement made last year. This is part of ADX's continuing effort to enhance market accessibility and widen participation in Abu Dhabi's capital market, Mr Alnuaimi said at the time.
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