The Dubai Financial Market is considering a move away from its home of 15 years – the historic World Trade Centre Tower.
Essa Kazim, chairman of the DFM, confirmed that the market is looking at a new home. “We’re thinking about having our own stand-alone building, and we’re looking at possible sites. It’s not decided yet but we’re thinking about our options,” he said.
New sites are being considered near the Dubai International Financial Centre and Business Bay, Mr Kazim added.
The Trade Centre Tower has been DFM’s base since the market was formed in 2000, with its characteristic wood-panelled trading floor. But it is believed the market feels the need for a more modern headquarters in the era of fully-automated trading and high-tech back office functions.
However, the new building could opt to retain some kind of trading floor for formal functions and as a networking facility. “Even the biggest electronic exchanges like to retain a trading floor, for ceremonial purposes like bell-ringing openings as well as educational and networking events,” he added.
He said that in Dubai’s first share trading boom, in 2004-05, the DFM trading floor was the heart of the emirate’s financial industry. “It was a crazy place, and brokers would fight to get a place there. That began to fall off when trading went online, but there are still reasons to have a trading floor,” Mr Kazim said.
The new premises, if chosen, would not be in the precincts of the DIFC, where, Mr Kazim confirmed, a US$1 billion development is being considered in a joint venture between Investment Corporation of Dubai, the emirate flagship investment fund, and the Canadian property developer Brookfield.
Central to the development – the first new project in DIFC since the financial crisis in 2008 – will be a 50-storey tower with related retail and hotel facilities.
Mr Kazim was speaking as the DFM made plans to celebrate its 15th birthday. That period has been characterised by a huge increase in trading on the market, by at least three boom periods, and three “corrections”.
“That is all normal and related to the business cycle. The trend has always been growing,” he explained.
When DFM first launched, there were 10 local companies with a market capitalisation of Dh30bn. Now there are 59 local and foreign companies listed on the DFM, with a total market value of Dh341bn.
Since 2000, shares to the value of Dh 2.4 trillion have been traded on the exchange, and new money to the value of Dh34bn has been raised in initial public offerings and other capital increases.
Mr Kazim said he was confident that new IPOs would come back to the Dubai markets this year once there was greater stability in the oil price. Corporates have mainly held off new listings in the volatility caused by the decline in crude oil prices.
“I’m optimistic there are a number of big IPOs out there. Investors are just waiting for a little more stability in the oil price. DFM – and Nasdaq Dubai – have all the ingredients in place to handle huge IPOs worth billions of dirhams,” he said.
He declined to comment on two potential challenges to the Dubai markets: the possibility of a merger of UAE markets into one trading body, and the growth of Abu Dhabi as an independent financial centre.
“These are not my responsibility,” he said.
Follow The National’s Business section on Twitter