2023 is proving to be a remarkable year for exchange-traded funds (ETF) trading on the Abu Dhabi Securities Exchange (ADX). As of October 11, ADX has already hit $1.2 billion since the start of the year.
Compared to the same period in 2022, ADX saw a staggering 364 percent increase in the value and volume of ETFs traded since the start of 2023. With this new development, ADX has become the most active and liquid ETF market in the Middle East and North Africa (MENA) region.
ETFs are investment funds traded on exchanges, tracking specific indices. They provide investors with a bundle of assets that can be bought and sold during market hours. This opportunity to significantly reduce risk and exposure is one of the major advantages of ETFs.
ADX’s ETF market
Since the beginning of the year, the volume of ETF trading on ADX has specifically surged to 815.7 million units. This is a big jump from 2022’s 161.2 million units. Moreover, the number of ETF transactions on the exchange has also risen significantly by 284.2 percent. It reached 30,800 since the year’s commencement, compared to 8,025 in the previous year.
ADX’s robust infrastructure is one of the main drivers of this surge in ETF trading. This is further bolstered by the exchange’s innovative strategy to expand investment options and solutions.
The new strategy of ADX follows the launch of its new identity for the ETF market back in November of last year. With this brand refresh, ADX has significantly improved liquidity and its range of tools and trading strategies.
“Our ability to innovate and introduce an increasingly diversified set of investment opportunities continues to set us apart as a leading regional exchange,” expressed ADX Managing Director and CEO Saeed Hamad Al-Dhaheri.
In June, ADX listed the Chimera – Standard & Poor’s China Hong Kong Shariah ETF. This tracks Shariah-compliant Chinese stocks on the Hong Kong Stock Exchange. Additionally, in August, ADX added an exchange-traded index fund that tracks Shariah-compliant stocks listed on the Istanbul Stock Exchange.
As a whole, the ADX has been witnessing a robust performance since last year.
In 2022, it was the second-largest market among Gulf Cooperation Council countries. It had five initial public offerings (IPOs), two dual listings, and six exchange-traded funds. In addition to this, it saw one listing on its secondary market, which facilitates investment in smaller privately owned businesses.
Earlier this 2023, the chairman of the Abu Dhabi Securities Exchange (ADX) expressed optimism about an increase in listings for the year.
“We have a healthy pipeline of IPOs and listings with aspirations to surpass 2022. There will always be challenges, but also opportunities,” expressed Hisham Khalid Malak.
In the first quarter, ADNOC Gas was able to raise $2.5 billion for its IPO. ADNOC Gas is the United Arab Emirates’ state oil company. In the succeeding quarter, ADNOC Logistics and Services’ IPO listing brought in $769.4 million to ADX.
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