In a key step toward financial market integration across borders, Dubai Financial Market and Shenzhen Stock Exchange signed an MoU that aims to facilitate cross-border trading and investment between the two exchanges. The objective is to advance their financial connectivity.
PC: Aletihad Newspaper
Key Areas of Cooperation
The following are some of the major areas under cooperation as envisioned in the MOU:
1. Dual-Listing and ETFs: Both exchanges will deliberate on dual listing of companies and ETFs. This move would provide investors with easier access to a wide variety of investment products and companies across both regions.
2. Mutual Display of Indices: There is a mutual display of indices, so that investors get a comprehensive view of market performance in both jurisdictions, thus promoting better investment decisions.
3. Fixed-Income Products: Both exchanges will work together to offer more fixed-income products and their availability to the exchange members’ clients, which will provide more investment avenues to the clients.
Collaborative Initiatives
The partnership will also support several collaborative initiatives:
1. Joint Roadshows: The two exchanges will undertake roadshows together in a bid to woo investors from the global community and showcase investment opportunities in each other’s market.
2. Research and Training: The MoU also allows for such cooperative initiatives in the realms of research and training. These efforts are oriented toward improvement in the spheres of market development, cross-border financing, and regulatory practices.
3. Market and Product Development: Exchanges will be sharing their experiences in market and product development, best practices in regulatory, and ESG standards. This kind of cooperation is bound to strengthen IT capacity and lead to innovative financial markets.
Leadership Quotes
Hamed Ali, Chief Executive Officer of Dubai Financial Market & Nasdaq Dubai, further emphasised the importance of the MoU by stating that “this MoU with Shenzhen Stock Exchange represents an important step toward deepening our cross-border relations, promoting global investment opportunities, and increasing the accessibility of markets.” He added, “Cooperation would tap the potential of the two financial markets and open new opportunities for investors and stakeholders from both regions to grow.
New Platform: ARENA by DFM
In related news, the DFM has opened a new platform called ARENA, tailor-made to facilitate capital raising for private firms. The platform provides an alternative to IPO markets and seeks to unleash growth opportunities for small businesses and family-owned companies. It also allows selling of shares of private companies by venture capital firms, opening an additional avenue for liquidity options.
Record IPO Activity
It has seen the IPO activity of DFM surge to a record $9.4 billion since 2021, driven by various factors such as privatisations, stock market rallies, and high energy prices that drive robust investor demand for share sales in the emirate.
This partnership between DFM and SZSE is a strategic one for strengthening financial connectivity across borders and thus creating new investment opportunities. Constructive cross-border cooperation, market development, and innovative financial products have been major focuses of this collaboration, bringing immense benefits to investors and set to raise the bar both for Dubai’s and Shenzhen’s financial markets.
