Abu Dhabi Securities Exchange (ADX) Reduces the Daily Maximum Decline of Shares to 5%

In line with SCA ‘Securities and Commodities Authority’

 The Abu Dhabi Securities Exchange (ADX) decided to reduce the maximum daily decline percentage for the shares of companies listed on ADX from 10% to 5%, from the previous closing price per session. This decision is effective as of Wednesday 18/3/2020 or until further notice from SCA.

This decision comes in response to H.E Engineer Sultan Bin Saeed Al-Mansoori, Minister of Economy, Chairman of SCA Board, regarding the reduction of the shares of the companies in the listed market and under the decision taken by SCA which states that the local market in the country may raise the percentage to 7% for a limited number of shares for some chosen companies. These select companies depend on a criteria determined by ADX and is approved by SCA.

ADX decided to keep the maximum daily rise limit at 15% as this decision is one of the measures and procedures ADX is taking which aims to protect savings of small investors, shareholders and institutional investors at this current time. 

Commenting on this decision, His Excellency Khalifa Salem Al Mansouri, Chief Executive of Abu Dhabi Securities Exchange, outlined: “that this decision comes in light of the global turbulences that have recently affected many financial markets. The Exchange is proactively anticipating events and working to secure the savings of investors and shareholders and preserve their wealth and investments, ADX has moved to reduce the maximum daily decline percentage for the shares of companies listed on the market from 10% to 5%, and to maintain the maximum daily rise percentage at 15%, from Wednesday 18/3/2020 until the stability returns to the financial markets.

His Excellency added: “The decision to reduce the maximum daily decline in the shares of companies listed in the market from 10% to 5% comes in line with solid principles of rebalancing trade so that trading activities are less impacted by the current global viral outbreak. This will support a stable investment climate underpinned by robust and stable foundations for all companies listed on ADX.”

His Excellency stated that the decision will come into effect with the start of Wednesday’s trading, as the decision will reduce investors’ sharp reaction during trading hours. The decision will also be in the interest of protecting the savings of individual investors, the wealth of shareholders and in preserving institutional investment funds. This move will also reduce significant downward stock movements for investors in the local market and will prevent against drifting behind sharp declines, such as those that affected stock exchange indicators of global and regional financial markets early last week”.

The market value of ADX listed companies increased by the end of 2019 to about 531 billion dirhams, which is 5.1% compared to 505 billion dirhams for the year 2018.

About Abu Dhabi Securities Exchange:

Abu Dhabi Securities Exchange (ADX) was established on November 15 of the year 2000 by Local Law No. (3) Of 2000, the provisions of which vest the market with a legal entity of autonomous status, independent finance and management.  The Law also provides ADX with the necessary supervisory and executive powers to exercise its functions.

ADX is a market for trading securities; including shares issued by public joint stock companies, bonds issued by governments or corporations, exchange traded funds, and any other financial instruments approved by the UAE Securities and Commodities Authority (SCA).

In 2014, ADX was upgraded to ‘Emerging Market’ status by both MSCI and S&P Dow Jones. ADX was already classified as an Emerging Market by FTSE in 2009 and in 2011 by S&P and Russell Investments.