Nasdaq Dubai Expects to Open Market for Small Companies in 2013

Nasdaq Dubai expects to start an alternative market this year dedicated to small and medium-sized companies as the stock exchange based in the emirate’s financial free zone seeks to boost listings.

The exchange is working to determine the minimum percentage of shares SMEs will need to sell to the public and the minimum market value required to qualify for listing, Hamed Ali, acting chief executive officer of Nasdaq Dubai, said in an interview today. Nasdaq Dubai has held meetings with an advisory council including industry representatives and experts, he said.

“We are positive with the progress we have had and we are well on track to have good news this year,” Ali said. “We are in a very strong position and we are the number one destination in the region for SMEs to establish.”

Under Nasdaq Dubai’s current listing rules, companies must offer at least 25 percent of their equity to the public to list and must have a minimum market value of $10 million. Some 95 percent of companies in Dubai are SMEs, employing 42 percent of the workforce and contributing 40 percent to the emirate’s economic output, the government said in 2011.

Companies are classified as SMEs if they employ as many as 250 people and post annual sales of as much as 250 million dirhams ($68 million), it said at the time. Nasdaq Dubai was set up in 2005 in the Dubai International Financial Center with the aim of applying regulations similar to those in developed markets, although it’s struggled to attract listings.

The London Stock Exchange started the AIM market for smaller companies in 1995 and has since listed more than 3,000 companies, according to its website. Dubai, one of seven sheikhdoms along with Abu Dhabi that make up the United Arab Emirates, is also home to the Dubai Financial Market.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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