Dubai Sees U.A.E. Bourse Merger Taking Time in ‘Busy’ Market

The planned merger of the United Arab Emirates’ two main stock exchanges, home to the second-best performing share gauge in the world, will take more time to complete, according to a Dubai government official.

“It’s still on the table,” Mohammed Al Shaibani, chief executive officer of Investment Corp. of Dubai, the emirate’s main state-owned holding company, said in an interview today at a Dubai conference. “We were hoping it would happen earlier. We knew that when the markets started to pick up again that the merger would be put on the shelf again as everybody is busy.”

Dubai’s DFM General Index has gained 47 percent this year, trailing only Argentina’s gauge, according to data compiled by Bloomberg. Abu Dhabi’s measure has climbed 19 percent. The Arab world’s second-largest economy is benefiting from a commercial and tourism boom and surge in real-estate prices.

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. The U.A.E. this year began trading with emerging market status at index provider MSCI Inc. after an upgrade from its frontier ranking. Decision makers in the country are still keen on the merger, Shaibani said.

“In terms of strategy it’s a no brainer, there should be one stock exchange,” he said.

The time isn’t right to sell shares in any Investment Corp. entities, Shaibani said. The holding company owns stakes in businesses including Emirates, the world’s biggest airline by international passengers, Emaar Properties PJSC, the developer of the world’s tallest skyscraper, and Emirates NBD PJSC, the U.A.E.’s second-biggest bank by assets.

“We have a few things on the table we are evaluating,” Shaibani said. “One of the challenges we have is most of the entities are on a high growth mode. So it’s not logical for us to give up value so soon.”

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