very good presentation from dfm dubai

8/3/2019 Very Good Presentation From DFM Dubai

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Dubai Financial MarketInvestor Presentation

Sept 2011


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i

MENASA Region : Macroeconomics . 1

Dubai : Middle Easts Financial Hub . 6

UAE Capital Markets : DFM / ND / ADX . 10

Two Exchanges, One Market : DFM & ND .... 17

Corporate Strategy : Going Forward .... 27

CONTENTS :


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UAE :AN ECONOMIC POWERHOUSE

THE REGIONMENASA / GCC/ UAEAN ECONOMIC POWERHOUSE


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Source:IMF, Global Insight, World Bank, World Market Monitor McKinsey, the World Fact Book and Abraaj Capital.

Iran

MENASA REGION :SOLID ECONOMIC FUNDAMENTALS-PROMISING GROWTH21,745

38158

99 103

1,347

MENASA GCC NORTHAFRICA

LEVANT& TURKEY

IRAN &IRAQ

SOUTHASIA

Population 2008

(Million)

4,248

1,073

542836

426

1,371

MENASA GCC NORTH

AFRICA

LEVANT

& TURKEY

IRAN &

IRAQ

SOUTH

ASIA

GDP 2008 (USD Billion)

7.1 7.3 7.4

9.4

10.0

6.0

6.9

2.71.4

2.6

1.52.0

2.2 1.51.2

0.9

MENASA GCC NorthAfrica

Levant Iran SouthAsia

US UK

Expected GDP and Population Growth

( 2007 -2014 CAGR - %)

GDP Population

59%

15%

1%

9%

33%

17%

8% 8%

MENASA North America Europe South America

Oil Reserves & Productionas a % of Global Total

Oil Reserves Oi l Production

1.7

x

0.8

x0.1

x

1.1

x

Menasaregions is

emerging as apowerful

economicbloc with

tremendousgrowth

potential,combining thesovereign

wealth funds(SWFs) of theMena region

to theeconomic

growth story

of, say, India,hence, theeconomic

paradigm shifttowards thisregion from

otheremergingmarkets.

7% of global GDP


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$-

$30

$60

$90

$120

$150

SaudiArabia UAE Egypt Qatar

Billions

Top Destinations for Foreign Direct

Investment in MENA (2010)

4UAE :MACROECONOMICS

The UAE, the second biggest Arab economy, is set to record3.4% growth in GDP this year, led by a focus on adoptingindustrial policies that will drive sustainable developmentacross the UAE.

-IMF 2011 Forecast

Source:IMF, World Bank

UAE is ranked 22nd globally for Value of Imports and 21st forExports

The UAE ranked 3rd in the world for quality of infrastructure

UAE is leading venue for FDI in MENA after Saudi Arabia

The UAEsstrong

fundamentalslessened theimpact of the

globalfinancial crisis


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5UAE :GROWTH PROSPECTS

Recovery in oil prices Strong growth in the non-

hydrocarbon sector UAEs service driven economy

benefitting from the global trade USD 50 billion worth of

infrastructural projects still underconstruction in UAE

Oil / Gas as % of GDP (2009)

UAE Trade Projections UAE Import/Export Projections

Ke

yContributors

toGrowth

Source:Dubai Chamber of Commerce

QATAR

UAE

SAUDI ARABIA

OMAN

BAHRAIN

61%

45%

41%

41%

21%


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DUBAITHE FINANCIAL HUB OF MIDDLE EAST


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7DUBAI :VISION & ECONOMIC STRENGTHS

Manufacturing,21.14%

Trade, 34.78%

Hotel &Restaurants,

2.39%

Transport,7.06%

Real Estate &Construction,

19.43%

FinancialSector, 8.39%

GovernmentSector, 3.45% Other, 3.36%

Strengths Reasoning

Highly sophisticated financial centre Dubai is ranked 7th as per International Financial Centres Competitive AssessmentReport , a competitive study of 15 key global and regional financial centres done byKPMG

Favorable business environment Dubai has been rated very high in ease of doing business ranking 33rd globally.-World Bank Index

Strategic location with a strong logisticsinfrastructure to bolster trade

Trade capacity in UAE has tremendously improved over the years with free-zones likeJAFZA.

Solid tourism sector Hotel occupancy rates remained high throughout 2010, benefitting both tourism and

trade activities.- DSC, 2010 Report

Dubais corestrengthsremain

fundamentallysound

Dubai GDP Share Breakdown byEconomic Sectors2009-10

Source :Dubai Chamber of Commerce

Our vision is clear, our goals areobvious, our strengths are great,our will is strong and we areready. We want Dubai to be aglobal center of excellence,creativity and leadership.

-HH Sh. MohammedRuler of Dubai

Well diversified economybased on international trade,banking and finance, tourism,information technology andreal estate


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8 Organizational restructuring of government departments &

related entities

Successful debt restructuring across all sectors with zero defaults

GDP is projected to grow at 4% and above going forward, asper IMF, way above the average GDP growth of westerncounterparts

DUBAI :RECENT EVENTS

Seems like thestars are

aligning for

Dubai onceagain

While challenges remain, the Dubai economy is on a much sounder footing especially asmuch of the excesses and speculative elements of the economy have been weeded out.What Dubai is now left with is an unparalleled logistics, commercial, retail, communicationsand transportation infrastructure in the region - and ready for business in a region that issitting in a fresh pile of cash thanks to high oil prices.


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8DUBAI :GROWTH PROSPECTS

Strong

Oil and gas

Manufacturing

Agriculture

Electricity/Water

Communication

Governmentservices

Construction

Trade

Professionalservices

Financialservices Tourism

Transportationand storage

Very weak Average

Dubais strength by international standards

Globally fast growing industries

with a strong position in Dubai

Globally fastergrowing sectors

Future globalgrowth

20102015

Globally slowergrowing sectors

Average globalGDP growth

Source :DSP 2015

Sectors qualifiedto be part offuturegrowth path


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CAPITAL MARKETSUNITED ARAB EMIRATES


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10CAPITAL MARKETS:KEY EXCHANGES IN THE REGION

CasablancaStock Exchange

Algiers StockExchange

Tunis StockExchange

Libya StockExchange Egypt Stock

Exchange

Sudan StockExchange

Istanbul StockExchange

Tadawul

Tehran StockExchange

QatarExchange

Palestine Stock Exchange

Beirut Stock Exchange

Damascus StockExchange

Iraq StockExchange

Kuwait StockExchange

Muscat StockMarket

Karachi StockExchange

Amman StockExchange

Cash & FixedIncome Equity,

Index &Commodity

FuturesOnly UAE offer a wide array of trade exchanges/products in

the entire MENA region


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11

USD Billion

END-OF-PERIOD MARKET CAPITALIZATION(2002 YTD 2011) DFM / ND

Markets

Breakdown

(USD Bn)

DFMsperformance

is in line withother GCC

counterpartswith

combinedmarket

capitalizationof USD70.4Bn

MARKET CAPITALIZATIONLIQUIDITY REVIEW

Source :DFM/ND Analytics

9.9

15.1

37.2

114.6

86.9

138.7

83.4

84.6

70.5

72.2

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

DFM,55.5

ND,16.7


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12TRADE VALUES :DFM PERFORMANCE

TRADED VALUE(20022010)USD Billions

v

Thin trading isrecorded

across allGCC marketsin 2010 with

averagedrop of 40%

in tradevalues as

compared to2009

Source :DFM/ND Analytics

0.8

1.1

13.9

110.4

94.8

103.4

83.8

48.1

20.3

2002 2003 2004 2005 2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

ADX

BSE

QE

DFM

KSE

MSM

ND

GCC Exchanges

5 Year Comparative & Trend Analysis2006 - 2010


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MARKET VELOCITYDFM PERFORMANCE

* Velocity = Annualized Trade Value / Average Market Capitalization

13

Source :Arabian Monetary Fund

7.7% 7.2%

37.3%

96.4%

109.1%

74.5%

100.5%

62.5%

28.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010

VELOCITY(20022010)


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DUBAI FINANCIAL MARKET | NASDAQ DUBAITWO EXCHANGES, ONE MARKET

S


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UAE MARKETS :REGULATIONS & OWNERSHIP15

RegulatoryAuthorities

Stock Exchanges

ADX DFM NASDAQ Dubai

SCA(UAE Regulations)

DFSA(International Regulations)

19.9%

79.62%

1%

19.38%

66.67%

33.33%

PublicStake

Ownership

Structure

100%

Governmentof

ABU DHABI

DFM TWO EXCHANGES ONE MARKET
http://www.adx.ae/http://www.borsedubai.ae/index.htmhttp://www.adx.ae/


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DFSA

DFM

Dubai Investor Pool

NDMembers

DFMMembers

CommonMembers

Dubai Listing

NASDAQDubai

SCA

OR

DFM :TWO EXCHANGES, ONE MARKETTHE CONCEPT16

InvestingMore than half a million retail investors brought

together with worldwide institutionalinvestors.

ListingIssuers have the option to list on DFM or

NASDAQ Dubai based on capital raisingand regulatory needs.

TradingCommon Members use the same trading

systems and can view DFM stocks and ND

stocks on one screen.

Openingdoors to alist of world

classproducts

and servicesto both localand foreign

investors

LISTINGSEQUITIES / FUNDS 80 13

DFM ND

INDEX FUTURES - 22

DEBT / SUKUKS 7 32

DFM GENERAL INDEX


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17DFM : GENERAL INDEXYTD PERFORMANCE

Source :Reuters

52 WEEKS INDEX PERFORMANCEIndexmovementremained

flat between2010-2011

1,431.71

1300

1400

1500

1600

1700

1800

1900

DFM TRADING PROFILES


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0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

06

/01/2011

16

/01/2011

26

/01/2011

05

/02/2011

15

/02/2011

25

/02/2011

07

/03/2011

17

/03/2011

27

/03/2011

06

/04/2011

16

/04/2011

26

/04/2011

06

/05/2011

16

/05/2011

26

/05/2011

05

/06/2011

15

/06/2011

25

/06/2011

05

/07/2011

15

/07/2011

25

/07/2011

04

/08/2011

14

/08/2011

24

/08/2011

03

/09/2011

13

/09/2011

23

/09/2011

18DFM : TRADING PROFILESRETAIL VS. INSTITUTIONAL MIX

Source :DFM / ND Analytics

YTD 2011TRADING ACTIVITY PATTERN

TRADING ACTIVITY BY CATEGORY

2006 2007 2008 2009 2010 YTD 2011

85.4

0%

77.6

0%

70.7

0%

79.1

0%

77.6

0%

71.7

0%

14.6

0%

22.4

0%

29.3

0%

20.9

0%

22.4

0%

28.3

0%

INSTITUTIONAL

RETAIL

AVERAGE INSTITUTIONAL TRADING = 28.3%

AVERAGE RETAIL TRADING = 71.7%TradingActivity :

Client typeMix

Growthmovement isseen among

institutionalinvestorswith 2011

YTDrecording

28% marketshare

DFM TRADING ACTIVITY


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19DFM : TRADING ACTIVITYLOCAL VS. FOREIGN INVESTMENT

Source :Reuters / DFM / ND Analytics

UAE VS.NON UAETRADINGACTIVITY

NON UAETRADINGACTIVITY

2006 2007 2008 2009 2010 2011

69% 70% 63% 60% 56% 50%

31% 30% 37% 40% 44% 50%

UAE Non-UAE

2006 2007 2008 2009 2010 2011

9% 6% 5% 6% 6% 6%

17%

12%14%

22% 23%21%

5%

12% 18%

12% 15%

23%

GCC OTHER ARABS OTHERS

DFM TRADE MATRICES


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DFM : TRADE MATRICESSECTOR MIX20

5%

14%

66%

2%11%

2%

Banks

Financial Services

Real Estate andConstruction

Telecommunicatiion

Transportation

Others *

TradeActivityBy Sector

2010

* Includes Materials / Insurance / Utilities / Consumer Staples

DFM OWNERSHIP


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DFM : OWNERSHIPSHARE OWNERSHIP RATIOS21

Distributionof Share

Ownershipin 2010 -

2011

BY TYPE OF INVESTOR BY NATIONALITY

FOREIGN OWNERSHIP AS % OF MARKET CAPITALIZATION

10%

13%

8%

12% 12% 12%

2006 2007 2008 2009 2010 2011

Foreign Ownership

2.59% 4.16%

4.47%

88.78%

Arab

GCC

Others

UAE

Retail36.36%

Institutions

63.64%

DFM : MARKET ACTIVITY


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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

3/10/2010

10/10/2010

17/10/2010

24/10/2010

31/10/2010

7/11/2010

14/11/2010

25/11/2010

6/12/2010

13/12/2010

20/12/2010

27/12/2010

3/1/2011

10/1/2011

17/01/2011

24/01/2011

31/01/2011

7/2/2011

14/02/2011

22/02/2011

1/3/2011

8/3/2011

15/03/2011

22/03/2011

29/03/2011

5/4/2011

12/4/2011

19/04/2011

26/04/2011

3/5/2011

10/5/2011

17/05/2011

24/05/2011

31/05/2011

7/6/2011

14/06/2011

21/06/2011

28/06/2011

6/7/2011

13/07/2011

20/07/2011

27/07/2011

3/8/2011

10/8/2011

17/08/2011

24/08/2011

5/9/2011

12/9/2011

19/09/2011

26/09/2011

22DFM : MARKET ACTIVITYDFM SHARE PRICE

DFM SharePrice

MovementYTD

2010- 2011

TradeVolumeYTD 2010

AED

AED 1.09

DFM : REVENUE MIX


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23DFM : REVENUE MIX

RevenueBreakdown2008-2010

2008 2009 2010

63.2%

75.3%

60.2%

32.0%

18.4%

28.5%

4.8% 6.3%11.3%

Trading Fee & Commisions Investment Income Other Income

DFM isactivelymovingtowardsrevenue

diversificati

on with2010

witnessing40%

revenuefrom

diversifiedportfolio

DFM : INVESTOR CENTRIC


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24DFM : INVESTOR-CENTRICATTRACTIVE PLATFORM FOR LOCAL &INTERNATIONAL INVESTORS

Easy accessibility

No income and capital gains tax

Non-restricted repatriation of capital

Minimal foreign exchange risk

Foreign ownership allowed for most listed companies

Diverse base of listed companies

Local and international regulatory framework

Innovative trading capabilities

UAE :


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CORPORATE STRATEGYDFM - ND

STRATEGIC INITIATIVES


28/34

26STRATEGIC INITIATIVESADDRESSING FUTURE GROWTH

Getting upgraded to MSCI Emerging Market Status

G30 Compliance and addressing the gaps

Organizational restructuring and monetization of financialservices

Initiating investorcentric services to increase liquidityand trading activities post merger

IPO focus and listings



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27STRATEGIC INITIATIVESMSCI UPGRADE

Key criteria'sfor Emergingmarket status

DFM is readyand meets all

eligibitlycriteria's for

MSCIupgrade toEmerging

market status

CRITERIA

A. ECONOMIC DEVELOPMENT

A.1 Sustainability of economic development

B. SIZE AND LIQUIDITY REQUIREMENTS

B.1 Number of companies meeting the followingstandard index criteria

i) Company size ( Full market cap )

ii) Security size ( Float market cap )

iii) Security liquidity

C. MARKET ACCESSIBILITY CRITERIA

C.1 Openness to foreign ownership

C.2 Ease of capital inflows/outflows

C.3 Efficiency of operational framework

C.4 Stability of the institutional framework

Emerging

No requirement

3

USD 873 Mn

USD 436 Mn

15% ATVR

Significant

Significant

Good & tested

Modest

DFM / ND

Strong economic

fundamentals with

expected GDP

growth of 4% for

2011

12

USD 71 Bn

USD 17 Bn

33.5%

49%(Current Foreign

Ownership12%)

Significant

Good & tested *

Good *

* Successful DVP implementation and introduction of SBL as part of G30 compliance



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28STRATEGIC INITIATIVESG-30 COMPLIANCE

Delivery Vs.Payment :

Implementation

UNCHANGED

1. T+2 settlementcycle;

2. Pre-validation ofsell orders will bemaintained.This means a

sellers agenttrading account

with local

custodian must

have securities

balances for pre-

validation before a

sell order can

become a valid

order.

CHANGED

1. Permitting Local Custodians ability to reject cash and securities settlement of selltrades back to executing Broker for settlement if Local Custodians do not receive(matched) settlement instructions from clients Local Custodians now have fullcontrol of assets [unnecessary to operate dual accounts].

2. Enhancing current rejection process for settlement of purchase trades;

3. Introduction of a Late Confirmation Period of T+4

4. Securities fails handling mechanisms which comprises:

a. Optional buy-in [between T+2 and T+3]

b. Mandatory buy-in by DFM on T+4.

c. Cash close out against the Local Custodian client [if mandatory buy-in againstselling Broker by DFM fails on T+4].

5. Penalties for Late Confirmation.

1. Reduce risk in Local Brokers having unlimited access to the Local Custodian Client Agent Trading Account.

2. Eliminate the requirement to use a dual account structure.

3. Progression in meeting international best practices under a pre-validation of sale market infrastructure.

4. Facilitate the achievement of Emerging Market status under the MSCI market classification.

DvPmethodology

has beensuccessfully

implementedat DFM as of

May 2011



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29STRATEGIC INITIATIVESORGANIZATIONAL RESTRUCTURING

Neworganizational

structure

DFM

DSX ND

FinancialServices

Business

De

velopment

CSD

EXCHANGES

Trading Enhancements Margin Trading Equity Swaps

WarrantsEnhanced Brokerage Services

iVESTORCards

DividendDistribution

Market Data

Feed

WebAdvertizing

OnlineSubscription

IPO

initiatives

e-Reports &e-Services

DVP SBL

In-house IPOSystem



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30STRATEGIC INITIATIVESPIONEERING IPO STUDY

DFMhas

commissionedIndependent

ResearchConsultants

forintensive

IPOstudy

Tap into the IPOmarket and

research over 500companies in the

UAE

Indentify the top100 companies inprime position of

going public

Develop a targeted IPOmarketing campaign in 2010-2011

Rectifying inconsistencies in theIPO market

Provide IPO outlook for DFM sshareholders

Publication of the Guide to going public Event hosted by DFM for the launch of the

Guide to going public for top financial &legal advisors

IPO Market Study and meetings arranged withpotential IPO candidates (E&Y)

DFM hosted high profile event for the 10th

anniversary of the exchange to support IPOinitiative

Approach the Free Zones in the NorthernEmirates

Initiate talks with the DED & JAFZA Initiate talks via the Dubai Chamber of

Commerce Nasdaq Dubai Initiative- Regional IPO Market

Study and meetings to be arranged with

potential IPO candidates.

The following initiatives have been taken

so far:

The following initiatives are currently

planned:



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31STRATEGIC INITIATIVESROBUST ENVIRONMENTFOR FUTURE LISTINGS

In-depth marketintelligence and

value addedservices

Investor andconsumer visibility

One of the mostliquid markets in

the G.C.C.

Free accessibilityof international

investors

In-depth IR andtrading analysis

Robust andreliable trading

environment

CONTACTS :

ii


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CONTACTS :

Soheib GhizaliAVP, Investor Relations

P.O.Box: 9700, Dubai, UAE

Tel: +971 4 305 5226Fax: +971 4 331 [email protected]

ii

Areej Al SaeedOffice ManagerExecutive Chairman's Office

P.O.Box: 9700, Dubai, UAETel: +971 4 305 5607Fax: +971 4 331 [email protected]

very good presentation from dfm dubai

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