The underlying economies of both the UAE and GCC region are strong and the outlook for listed companies robust said Tom Healy, Chief Executive of Abu Dhabi Securities Exchange (ADX), reported the Emirates News Agency WAM.
Speaking at a conference on Exchange Traded Funds in Abu Dhabi, Healy also said that investors should take a long-term view on both the securities they invest in and the overall economic situation.
“Recent stock market performance does not reflect Abu Dhabi’s economic strength”, said Healy. “Abu Dhabi is in a strong fiscal position and is not reliant on foreign funds. Gross domestic product (GDP) is expected to continue growing and our listed companies reported positive financial results in the first half of this year.” Healy said that the strong economic outlook also applied to the whole GCC region with GDP figures predicted to be 5.6% and 6.1%[1] for 2007 and 2008 respectively.
Healy went on to explain the vital role played by a stock exchange in a national economy, and said that despite recent volatility the outlook for ADX was strong.
“The stock exchange is essential for the development and operation of orderly markets and ensures high levels of transparency and disclosure. It develops innovative investment opportunities to meet the future demands of our stakeholders and aid capital growth. This is why we have an important role to play in the ambitious strategic plan, outlined by the Abu Dhabi Executive Council,” he said.
“This is why I urge investors to take a long-term view. Recently we have not been immune to what is going on in global markets, but the outlook for ADX listed companies is healthy.” Healy explained that an important part of ADX’s strategic plan was to provide investors with more diverse investment opportunities and that one of these opportunities was Exchange Traded Funds (ETFs).
“ETFs are generally less risky than individual equities, they are transparent, very cost-effective, are easy to trade and therefore ideally suited to the dynamics of ADX”, he said. “As we diversify our product offering, we hope to attract more institutional investors who have a more long-term approach and can therefore bring more stability to the market.” “The long term economic standing of the Gulf markets relies on diversified investment opportunities to meet the demand of local retail investors and the more long-term institutional investors. ETFs are an excellent starting point to reach this goal”, he concluded.
