Despite a slide in the global markets, two Middle Eastern bourses Bahrain and Abu Dhabi will begin listing the area’s first exchange traded funds.
ETFs are investment vehicles that hold assets such as stocks or bonds and trade at almost the same price as the net value of its underlying assets over the course of the trading day.
The Abu Dhabi Securities Exchange (ADX) plans to list at least two local and two foreign ETFs early next year while Manama’s securities market is aiming to launch ETFs in the first half.
Bahrain plans to list its first ETF in the first half next year as part of its strategy to offer new investment options, said Bahrain Stock Exchange head of trading Ebrahim Al Aradi at an ETF investment conference yesterday.
“We are working on the regulations, ETFs are needed for our exchange and investors,” he said.
“We see wide-ranging investment opportunities, especially during market downturns and ETFs are likely to attract long-term foreign institutional investors to the region,” ADX chief executive officer Tom Healy said.
“Towards the end of this year or at latest, early next year, we will be listing our first ETF from domestic banks. There’s also significant interest from Taiwan, Japan and Pakistan,” he said.
ADX is in advanced talks with some local banks and some of them could be major players in structuring and launching ETFs, said ADX head of market and product development Elie Ghanem.
“The regulations are ready and we are about to finalise our internal tests on the platform,” he said, adding ETFs are ideal for individual investors to diversify risk at low cost.