Dubai Bourse Merger With Abu Dhabi Will Progress, Shaibani Says

The merger of the United Arab Emirates’ two main stock exchanges may take place “very soon,” according to a Dubai government official, a move that will create the Middle East’s second-biggest bourse.

“I can see something will happen soon to clarify the way forward,” Mohammed Al Shaibani, chief executive officer of the Investment Corp. of Dubai, the emirate’s main state-owned holding company, said on the sidelines of a conference in London yesterday. The latest talks for the deal took place in November at the Dubai Airshow, a biannual global aviation fair, he said.

The Dubai Financial Market PJSC and the Abu Dhabi Securities Exchange (ADSMI) are among the world’s 10 best-performing equity markets this year as the U.A.E. benefits from a real-estate driven recovery. The merger would further stimulate the economy, Mohammed Al Hashemi, chairman of the UAE Financial Markets Association, said in October.

The U.A.E.’s two biggest sheikhdoms completed due diligence on the potential merger at the end of last year, two people familiar with the matter said in February. Ultimately the deal will come back to the table and “it’s just a matter of time,” said Shaibani, also the director general of the Dubai Ruler’s Court, without elaborating.

Dubai’s DFM General Index, which beat all 92 of the world’s stock gauges tracked by Bloomberg this year and last, and the ADX General Index have a combined market value of 771 billion dirhams ($210 billion). That compares with $517 billion for Saudi Arabia’s bourse and $214 billion for Turkey’s.

MSCI Upgrade

The U.A.E. was upgraded to emerging-market status from its frontier ranking by index provider MSCI Inc. last year. The reclassification, which may see developer Emaar Properties PJSC added to the MSCI Emerging Markets Index, may draw more liquidity to the Arab world’s second-biggest economy as fund managers buy shares to mirror indexes tracked by investors managing more than $8 trillion.

Dubai’s stock gauge has surged 38 percent so far this year after more than doubling in 2013, while Abu Dhabi’s benchmark has gained 17 percent in 2014.

Economic growth in Dubai is set to average 4.6 percent a year between 2012 and 2015, more than twice the rate of the previous four years, according to government forecasts.

To contact the reporters on this story: Matthew Martin in Dubai at mmartin128@bloomberg.net; Sarmad Khan in Dubai at skhan170@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net Zahra Hankir, Daliah Merzaban

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