ADX launches plans for short selling service

The Abu Dhabi Securities Exchange aims to launch a short selling service as part of a modernisation and liquidity drive.
By Paul Walsh
The Abu Dhabi Securities Exchange (ADX) has unveiled plans to launch a short selling service in early 2017.

ADX has already started the process of introducing the service through meetings with brokerage companies in Abu Dhabi and Dubai in a bid to increase foreign investment and boost overall liquidity.

“This service is part of continuing efforts to modernise, enlarge and upgrade the market. It also aims at diversifying investment instruments in order to increase the level of liquidity to match global markets,” said Abdullah Al-Blooshi, CEO at ADX.

ADX short selling regulations stipulate the price of sold stock must be higher than the price of the last deal price or one unit higher. Should the price slump 5% during the same trading session, the automatic short selling mechanism will be ceased the same day as well as during the following trading day.

“This efficient system guarantees instant disclosure for all stocks open for short selling, the daily volume, the dates of trading as well as the automatic time of these sales,” said Al-Blooshi.