Dubai Financial Market Company (PJSC) today announced its financial results for the first nine months of the year ending 30 September 2018, registering a net profit of AED 103.7 million, a 40% decrease from AED 173.3 million in the same period of 2017.
Net profit of the third quarter of 2018 decreased 25% to AED 20.9 million, compared to AED 27.7 million in the third quarter of 2017.
Total revenue reached to AED 251.9 million during the nine months’ period ended September 30, 2018 compared to AED 313.3 million during the corresponding period of 2017. The revenue is comprised AED 154.3 million of operating income and AED 97.6 million of investment returns. Company expenses reached AED 148.2 million by the end of September 2018 compared to AED 140 million in the same period of 2017. During the third quarter of 2018, Company’s revenue reached AED 69.5 million compared to AED 74 million in the third quarter of 2017, while expenses amounted to AED 48.6 million in the same period compared to AED 46.3 million.
It is noteworthy that the total value of trading on DFM decreased by 44.8% to AED 47.7 billion during the first nine months of this year compared to AED 86.5 billion in the same period last year. The daily average of trading value decreased 45.18% to AED 253.8 million compared to AED 462.9 million during the same period of 2017. During the third quarter of this year, trading value decreased 32.7% to 11.2 billion compared to AED 16.7 billion in the same period of 2017. Trading commission is the main revenue stream for DFM Company.
Accelerated development efforts
His Excellency Essa Kazim, Chairman of the Dubai Financial Market Company (PJSC) said: “During the first nine months of 2018, the DFM has accelerated its efforts to further enhance its infrastructure and regulatory framework as well as diversify product offering and services in line with international best practices and as part of its strategy 2021. Within this context, we have accomplished preparations to launch a new REITs Platform that will represent an important addition to our product offering, after receiving approval of the Securities and Commodities Authority (SCA) on DFM Rules of Listing and Trading of Real Estate Investment Trusts (REITs) that we drafted in line with international best practices. Earlier on the year, we signed MoU with the Dubai Land Department, as part of our efforts to create a favorable framework for the development of the REITs sector, which has a promising potential considering the importance and global reputation of Dubai’s real estate sector.”
Expansion of services to enhance trading activity
“We also pursued our efforts to further enhance trading activity mechanisms and services. Accordingly, the DFM has witnessed an expansion in the market making and liquidity provision service launched in 2017, and it currently includes four service providers. Additionally, our investors can avail the margin trading service through 30 brokerage firms as well as the Direct Market Access (DFM) service through 14 brokerage firms. Such services create a comprehensive framework that supports the market activity of both investors and brokerage firms alike,” HE/ Essa Kazim added.
It is noteworthy that the DFM has launched the Allocation Account mechanism earlier in 2018, in a first step of its kind amongst regional markets. This service creates a unique and transparent solution that caters for the requirements of international fund managers, enabling brokers to implement the orders of clients through this account and allocates the quantities to each investors account based on the average price of the transactions.
The Repo offers investors flexibility to benefit from their securities
The year 2018 also witnessed the accreditation of the first Repo buyer on DFM after granting Equities First Holdings, LLC (EFH), a global lender and a leader in shareholder financing solutions, the approval to provide repurchase (Repo) transactions. This service enables investors to benefit from their securities through repurchase agreement with a Repo buyer, thus releasing value while having the ability to repurchase the securities within a specific timeframe. The first Repo transaction on DFM was completed last July.
Strengthening links with international institutions
Commenting on efforts to promote its listed companies through international investor roadshows that the DFM constantly organizes since 2007 in a leading step amongst regional exchanges, HE/ Essa Kazim said: “This year, our flagship roadshow has reinforced its achievements with very constructive events in New York early May and in London in September 2018. The latter was organized in collaboration with HSBC and in conjunction with the Global Emerging Markets Investor Forum (GEMS), one of the largest investment forums organized by the Bank for the first time. The roadshow has achieved tremendous success connecting listed companies with representatives of 49 international institutions, 28% of them took part for the first time, in a clear indication on DFM’s sustained ability to attract investors, due to its lucrative opportunities and the sound fundamentals of the national economy.”
