Let there be two!

While I'm usually not exorbitantly intrigued by financial stuff, I found it interesting that the UAE's financial markets seem to reflect the overall status of the two biggest emirates, too.

With regard to securities trading, the outstanding role of the two largest of the seven Emirates forming the UAE becomes obvious once more. There's one exchange in Abu Dhabi, the Abu Dhabi Securities Exchange (ADX), and one in Dubai, the Dubai Financial Market.

At first glance, there appear to be many similarities: Both markets were formed in 2000, both want to serve the national economy and support "economic prosperity" - so their perspective goes beyond the respective local home base. Indeed, they appear to be direct competitors, as both want to become the "market of choice" in the region. The indices of both include a lot of financial companies, insurances, and construction, and both stress integrity, fairness, and transparency. And of course, currently both are not exactly soaring.

Talking to a colleague, I learnt that local companies tend to be financial patriots: if you're in Abu Dhabi, you may be more inclined to go public through ADX; if you're from Dubai, you rather choose the Dubai Financial Market. And, apparently, Dubai has a better reputation in terms of corporate governance. But that's only hearsay, of course.

The main objective difference I saw: DFM appears to be clearly the larger market, for example in terms of market capitalization or daily trade value (the latter about Dh 239.5 mio. vs. Dh 63 mio at 12 am). And Dubai experienced stronger growth over the past few years - which of course is absolutely in line with the Emirate's efforts to attract business as part of Dubai's success story of the past 10 years.

So here we are again - Abu Dhabi and Dubai are the big guys, with Dubai being the recent years' rising star. Well. Considering I just spoke about financial markets, that's pretty interesting, huh?