DUBAI — The Middle East’s first equity market for small and medium-sized businesses could be ready as early as this year, Arabian Business online said Thursday, quoting a Nasdaq Dubai acting CEO Hamid Ali.
An advisory group working to establish the regulatory model and trading framework for the new exchange is set to be completed in the next few months, Ali said, adding that regulator approval will follow.
“Our aim is to be able to launch something this year that gives easier access for smaller companies to come to an exchange,” he was quoted as saying.
About 72,000 SMEs generate 40 percent of Dubai’s gross domestic product, according to NASDAQ Dubai.
Yet many struggle to reach their full potential, including expansion, without financial backing, which is presently difficult to get from banks, Arabian Business said.
The new exchange would have different standards to the Nasdaq Dubai, such as reducing the minimum number of years a company had to exist before it could list.
Ali said it would aim to attract issuers from the Middle East and around the world to carry out initial public offerings (IPOs).
“Dubai has been home over the past 60-70 years for business to set up and grow from here,” he told Arabian Business.
“Forty percent of our economy today depends on SMEs. It makes sense for us, the capital market, to introduce something that supports that growth because of how key and how important it is historically in Dubai as well as the contribution to the economy.”
The plan for an SME equity market was included in the emirate’s SME sector development strategy in 2009, Arabian Business said.
The Dubai Financial Services Authority, the Nasdaq Dubai regulator, has reduced the minimum market capitalization for an IPO from $50 million to $10 million. — SG