The closest thing to an ETF market in the Middle East at this
point is Turkey, where there are five ETFs from two asset managers

Abu
Dhabi, the major Middle East financial center, says it’s preparing to create a platform to launch
exchange-traded funds.

In detailing plans on Thursday, Rashed Al Baloushi, the deputy chief executive of the Abu Dhabi Exchange
(ADX), credits increasing ETF demand by retail and institutional
investors in the Middle East for the exchange’s decision to build an ETF-specific platform.

Across
the Middle East, ETFs and other traded securities are proving more popular and
catching the attention of exchanges. The Dubai International Financial Exchange
(DIFX), as well as exchanges in Oman and Saudi Arabia, have also shown interest
in adding ETFs.

The latest ETF plans are also part of ambitious efforts by many Middle
East markets to diversify away from oil wealth and become true, global
financial centers.

Earlier this year, the Abu Dhabi Securities Market signed a
joint venture deal with NYSE Euronext. The United Arab Emirates’ Borse Dubai
and the Qatar Financial Authority bought large stakes in the London Stock
Exchange last year, and DIFX inked a strategic deal with NASDAQ to develop its
regional platform.

The
Egyptian Stock Exchange has said it plans to list ETFs, stock and index futures
and options, in the next year, and a major Egyptian bank already has plans to
list an ETF on the primary Egyptian stock index (see story here.)

Baloushi made his comments while speaking at a brokerage conference in Abu
Dhabi. ADX has been working with ETF consultants to
study the success of ETFs in other global markets.

Across the globe, net sales of ETFs have been rising as net assets in
traditional mutual funds have decreased. In Europe, for example, net sales into
ETFs were $43 billion through the first seven months of the year, while
traditional funds had outflows of $148.6 billion, according to Barclays Global
Investors data.

The closest thing to an ETF market in the Middle East, at this
point, is Turkey, where there are five ETFs from two asset managers,
according to BGI.

– this report was submitted by Eric Rosenbaum. He can be reached at: erosenbaum@indexuniverse.com

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