Staff Reporter, Gulf Today

The UAE bourses on Tuesday announced major initiatives to attract and boost liquidity and investment opportunities. The Abu Dhabi Securities Exchange (ADX)  and Dubai Financial Market (DFM) said there will be no minimum commission fee on trades in all listed securities with effect from August 31, 2021 and September 1, respectively.

ADX announced on Tuesday it waived its minimum commission fee on trades in all listed securities starting today 31st August to further encourage market participation among individual investors on one of the best performing markets in the world this year.

The decision follows the announcement on Saturday of a 50% reduction in trading commissions along with an extension of market opening hours by one hour to 3 pm. These initiatives are part of the “ADX One” strategy announced at the beginning of this year, which aims to bolster activity and deepen liquidity on the exchange.

The removal of the minimum commission fee will facilitate higher volumes of small trades, typically undertaken by individual investors. The idea has been met with positive feedback in informal soundings among key stakeholders, including investors, brokers and listed companies.

Saeed Hamad Al Dhaheri, Chief Executive Officer of Abu Dhabi Securities Exchange, said, “ADX is an increasingly vibrant market that provides global and local investors with high quality access to the strong economic fundamentals in the region, and Abu Dhabi in particular. By waiving the minimum fee and reducing commission rates on all listed securities, we are providing more cost-effective trading for individual investors, ensuring that they benefit from the investment opportunities available to institutional investors. By increasing liquidity as well as broadening our offering of products and services, ADX will become an even more attractive market.”

The reduction in trading fees to 0.025% from 0.05%, which will take effect on 1st of September, is the exchange’s second commission cut in 2021, and the third in three years. Meanwhile, the decision to extend trading hours will be implemented from 3rd October.

The Abu Dhabi Securities Exchange General Index (ADI) has recently reached 7700 points for the first time, supported by a series of listings and increased participation by international investors. In addition, the index has gained 52% year to date, making it one of the best performing equity indexes in the world.

The Dubai Financial Market (DFM) also announced on Tuesday that the minimum trading commission will be waived as  of September 1, 2021, as part of its numerous initiatives aimed at promoting retail investors’ participation in the market and enabling them to avail its lucrative investment opportunities that include a diversified range of asset classes and financial products.

Hassan Al Serkal, CEO of the DFM said: “Waiving the minimum trading commission represents a significant development for retail investors in particular, as it will directly reduce the transaction cost and consequently maximises the potential return, hence encouraging them to further trade on the market. The larger number of transactions will ultimately benefit various stakeholders including investors, brokerage houses, etc.

Meanwhile,  a gauge of global equities headed for its seventh consecutive month of gains on Tuesday, but stocks and the dollar traded flat on the day as weak economic data suggested slower growth ahead as investors await a US jobs report at week’s end.

U.S. consumer confidence fell to a six-month low in August as soaring COVID-19 infections and rising inflation dampened the economic outlook, a view that data from China, Canada and the EU to a degree also suggested.

China’s businesses and the broader economy came under increasing pressure in August as factory activity expanded at a slower pace and the services sector slumped into contraction. In Canada, the economy unexpectedly shrank 1.1% in the second quarter on an annualized basis.

Euro zone inflation surged to a 10-year-high in August with further rises likely, which markets mostly shrugged off as the European Central Bank’s narrative of temporary inflation and ultra-easy policy for years remained intact.

The Delta variant has cast a shadow on US consumer optimism, which had soared earlier in the year on expectations vaccines would enable a return to normalcy, said Jim Bard, chief investment officer at Plante Moran Financial Advisors.

“Consumers are increasingly aware of the near-term risks to the economic recovery created by rising prices and the COVID-19 resurgence,” Baird said in a note. He added confidence remains relatively high and consistent with solid consumer spending.