Stock exchange industry in UAE: An assessment of potential merger between Dubai financial market and Abu Dhabi securities exchange. Issue 3 (20th July 2015)

• Record Type: Journal Article
• Authors: Paltrinieri, Andrea
• Is Part Of: International journal of emerging markets. Volume 10:Issue 3(2015)
• Page Start: 362
• Page End: 382
• Publication Date: 2015-07-20
• Subjects: United Arab Emirates -- Market capitalization -- Abu Dhabi Securities Exchange -- Dubai Financial Markets -- Stock exchange mergers -- Trading value; Business enterprises -- Finance -- Periodicals; Investments -- Developing countries -- Periodicals; Commerce -- Periodicals; Developing countries -- Economic conditions -- Periodicals; 330.91724
• DOI: 10.1108/IJoEM-12-2012-0181
• Languages: English
• ISSNs: 1746-8809

Abstract

Abstract : Purpose: – The purpose of this paper is to give an overview of UAE Stock Exchange industry. In particular this paper aims to assess a potential merger between Dubai Financial Markets-Nasdaq-Dubai and Abu Dhabi Securities Exchange, evaluating risks, rewards, policy and business implications. Design/methodology/approach: – The paper presents a theoretical framework and a literature review of M & As in financial sector. It then carries out a case study on a potential merger between the UAE Stock Exchanges and a discussion on the implications for the actors involved. Findings: – The contraction both in market capitalization and in trading value in the three UAE Stock Exchanges caused by subprime financial crisis and market fragmentation could be a key factors in implementing a merger between them. Because of high-fixed costs and trading platform, a single consolidated stock exchange may benefit from significant economies of scale, particularly network effects, and economies of scope. Practical implications: – This paper could be useful to Security and Commodity Authority, in order to support a merger between Dubai and Abu Dhabi Stock Exchange. Given that UAE capital market regulator has tried to improve efficiency in UAE stock market over the last years, a merger between UAE Stock Exchanges could have positive effects on overall efficiency. Originality/value: – It is the first paper that analyze UAE Stock Exchange industry. It is the first study that focusses on a potential merger between emerging markets' stock exchanges. It is one of the first contributions that relates stock exchanges belonging to emerging and developed countries.