The Abu Dhabi Securities Exchange (ADX) has announced plans to cut trading fees by 22 percent, one of a number of initiatives designed to boost activity and liquidity on the bourse.
The fee cut will come into effect from Feb. 14 as part of its new ADX One strategy to double the market capitalization of companies listed on the exchange by 2024.
It is the second time ADX has reduced fees, the previous cut being in June 2019. Under the new plan, fees of all transactions that occur on ADX will be reduced to 0.175 percent from 0.225 percent from Feb. 14.
In another initiative to boost trading volume, ADX brokerage firms that generate 20 million UAE dirhams ($5.45 million) or more in trading commission will be exempt from paying any trading commission fees for the year.
ADX Chairman Mohamed Ali Al-Shorafa Al-Hammadi said: “Reducing overall transaction costs for trading on the exchange is one of many initiatives we are undertaking to achieve our strategy of attracting new liquidity sources and making listing and investing in ADX an attractive value proposition.”
The market capitalization of stocks listed on ADX reached 750 billion dirhams for the first time in 2020, a 39.7 percent increase from 533 billion dirhams in 2019.
The number of foreign investors on ADX increased 38 percent in 2020, while the value of shares they traded rose by 6.5 percent to 62.6 billion dirhams. Trading by institutions rose 35.6 percent to 111.1 billion dirhams last year.
According to data by Zawya, ADX was one of the best-performing stock markets in the region in January, up 10.9 percent to 5,593.5 points. It rose to 5,676.15 points by the middle of the month, achieving a 15-year high.
The main gains were in the insurance-related sector. The volume of trades rose 3.8 percent to 2.2 billion, while the value of trades was up 20 percent month-on-month to 10 billion dirhams.