Dubai Financial MarketALEXANDRIA - EGYPT

26 April 2009

About DFMAbout DFM

Mission Statement:

To create a fair, efficient and transparent marketplace that provides choices through the

best utilization of available resources in order to serve all stakeholders.

Vision:

The Financial Market of Choice

DFM ObjectivesDFM Objectives

1. Providing an opportunity to invest in securities in a manner that better serves the national economy.

2. Regulating the process of trading in securities ensuring the protection of investors from unfair and improper practices.

3. Creating highest liquidity in the marketplace through the interaction of supply and demand based on fair and equitable trading practices between investors.

4. Organizing the transfer of securities ownership through the CSD Department, which operates an electronic system ensuring efficiency and timeliness of transfers.

5. Implementing rules of professional conduct and discipline between brokers and DFM staff to maintain a high level of integrity and provide them with proper training.

6. Collecting data and statistics about securities and issuing reports based on this information.

Securities & Commodities Authority

Dubai Gold and Commodities Exchange

Dubai Financial Market

Abu Dhabi Securities Exchange

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UAE Capital Market Structure UAE Capital Market Structure

Dubai Financial Services Authority

NASDAQ Dubai Dubai Mercantile Exchange

A purpose built free zone regulator, which is independent of all financial and ancillary services conducted through the Dubai International Financial Center(DIFC)

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Dubai Free Zone ExchangesDubai Free Zone Exchanges

20%

LSE

Borse Dubai

80% 19.99%

NASDAQ-OMX

NASDAQ-DUBAI

DFM

Public

20%

• Borse Dubai has 3 main shareholders :

ICD (International Corporation of Dubai): 60%

DIFCI (Dubai International Financial Center Investments): 20%

DFG (Dubai Financial Group): 20%

Comments

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Dubai Capital Market Expansion Dubai Capital Market Expansion

DFM – P.J.S.C.DFM – P.J.S.C.

DFM – P.J.S.C.DFM – P.J.S.C.

Date of Listing: Mar 7, 2007

Sector: Investment & Finance Services

Authorized Capital: 8,000,000,000.00 AED

Issued Shares: 8,000,000,000.00

Par Value/Share: 1.00

Ownership 80 % owned by Bores Dubai and 20 % public

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Federal Regulatory Developments

Companies Law:

• Reduction of minimum floatation from 55% to 30% for family businesses.

• Capital Markets Regulations

• GCC citizens are treated as UAE nationals.

SCA Regulatory Developments

2007 - 2008 ( completed )

• Companies Law

- New rules being added.

2009 (expected)

• Corporate Governance Guidelines.

All listed companies should implement the guidelines by April 2010 .

• Capital Adequacy .

• Custodians – drafted .

• Margin Trading – Brokers training phase.

• ETF – approved.

• Drafted new IPO rules which is due to be published soon.

Regulatory DevelopmentsRegulatory Developments

DFM Main ComponentsDFM Main Components

TradingClearing, Settlement &

Depository (CSD)

Registry Upload & Update

Stock Transfer

• Corporate Actions• Bonus shares• Stock Split• Raising capital

Trading Settlement

Investor Numbers

Securities safe keeping

Organizing trading

Listing securities

Brokerage licensing

Arbitration

Market Control

Brokers Monitoring

Disclosure monitoring

Accessing DFMAccessing DFM

Fully Automated Trading system

Recorded phones

Settlement type is T + 2

Trading priorities : Best price & best time

Prompt transfer of ownerships

DFM is accessible to all international investors

Foreign ownership allowed for most traded companies

Absence of Capital gain tax Dubai government’s commitment to growing capital markets as part of

Dubai vision

DFM Trading SessionDFM Trading Session

ContinuousTrading

Order Entry

9:30 am9:30 amPre-Open Session

10:0010:00ToTo

2:002:00

2:002:00 Closing

Communication ToolsCommunication Tools

TradingSystem

Clearing,Settlement

And Depository

RiskManagement

• Continuous, order-driven, fully automated trading system

• Tight coupling with depository system, enabling validation of sell orders against depository inventory prior to trading

• Transparent, automated and cost-effective information dissemination

• Upgrading to a high performance OMX X-Stream system

• T+2 rolling settlement with multilateral netting

• Same-day turnarounds (back-to-back transactions)

• Corporate actions (cash dividends, stock splits, bonus issues, etc.)

• Undertaking an operational review to ensure compliance with G30 recommendations

• Trades once executed are final and irrevocable

• Trading limits for market participants commensurate with posted collateral

• Immediate suspension of trading for defaulting brokers

• Established business continuity and contingency plans

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Operational Capabilities Operational Capabilities

• Huge excess with OMX x-stream( executes more than 720,000 trades per session)• Reliability and fault tolerance• High performance• Scalability and functional depth provides for virtually unlimited growth • The ability to integrate new business functions allows the trading system to evolve quickly and

effectively in response to competitive and regulatory pressures

• Voice recognition system• Adopting the DVP model in support of international investors• Offering facilities such as (securities borrowing and lending and buy-in) to facilitate successful

settlement

OMX X-Stream

CSD

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Innovating to Advance DFM’s Performance Innovating to Advance DFM’s Performance

Trading Value

DFM PerformanceDFM Performance

Trading Volume

DFM PerformanceDFM Performance

Market Capitalization by Sector

DFM PerformanceDFM Performance

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Foreign Ownership By Category(%)

Foreign OwnershipForeign Ownership

Listings Progress in DFMListings Progress in DFM

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009UAE 10 1 1 1 4 10 6 7 3 1Forign Companies 0 0 0 0 1 2 10 3 5 0Funds 0 3 1 2 2 2 1 4 1 0Bonds & Sukuk 0 1 0 1 1 3 1 0 2 0Stocks 10 11 12 13 18 30 46 56 64 65

Listings Progress in DFMListings Progress in DFM

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Stock GameStock Game

2009 2008 2007 2006 2005 2004 2003  

28 16 22 38 25 21 17 Colleges

2103 1156 1493 2705 1360 783 357 Students

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DFM StatisticsDFM Statistics

767,841 Total Number of Investors

239,217 Foreign Investors

101 Total Brokerage Firms

DFM & SocietyDFM & Society

Clearing, Settlement & Depository Division

CSD

Clearing , Settlement & Depository Division

Director

Central Depository

Department

Investors Affairs

Department

Clearing & Settlement

Department

Call Center

CSD Organizational ChartCSD Organizational Chart

1. Is considered a major Division and most important foundation of DFM.

2. Supports the market’s functions through efficient and active performance.

3. Provides the DFM stakeholders with the optimum services.

4. Efficiently and confidentially manage and keep securities to protect all parties rights.

CSD in Brief CSD in Brief

CSD in brief … cont

5. Handles depository and safekeeping of all securities listed in the market.

6. Organize, Manage and Maintain the database for all listed securities in the automated clearing system.

7. Provide the listed companies, accredited brokers and custodians with the direct linkage of the automated clearing system.

8. Operates with dematerialization securities.

9. Carry out clearing and settlement of all trades executed in the market.

10. Acts as counterpart to each broker or custodian.

11. Deals directly with the settlement banks for the purpose of settling the net to pay and to collect to and from the participants.

CDS in brief … cont

CSD Provides Services for the following: CSD Provides Services for the following:

1. Generating and updating the unified Investor Number (IN).

2. Reserving securities of investors unwilling to trade.

3. Transferring ownership from certificates to electronic environment.

4. Transferring securities ownership between investors in execution of family& inheritance deals, court orders, trades made prior to DFM opening, and other.

5. Stock Transfer :Transferring Securities from CSD Account to Broker Account.

CSD Investor Services CSD Investor Services

CSD Investor Services … cont

6. Registry Transfer : Transferring Securities from Broker Account to CSD Account.

7. Transferring Securities Between Brokers.

8. Issuing many types of “Securities Balance Statements” at request.

9. Issuing Audit confirmation letter at request.

10. Issuing and delivering statements to subscribing investors ( Daily, Weekly & Monthly).

CSD Investor Services … cont

11. Sending free statements to investors on a quarterly basis.

12. Sending free statements to traders on a daily basis.

13. Providing E-Services to Investors, enabling them to register through “Electronic Reports” , to view their stock account balances online.

14. Issuing Power of Attorneys for the purpose of Dubai Financial Market Only.

15. Changing/Adding of investor information.

16. Marking pledge on securities

1. Transferring Securities between CSD and Brokers. Stock Transfer Registry Transfer

2. Managing Bank Guarantee. Minimum of AED 20 Million Maximum Trading Limit

CSD Brokers Services … cont

CSD Brokers Services … cont

3. Increasing the Trading Limit: New Bank Guarantee Undertaking Letter from the Issuer Bank of B.G. Deposit in DFM Account Freeze Securities Guarantee Amount that is to collect on (T+1)

4. Managing Clearing & Settlement process: Prepare Settlement Report on (T+0). Confirmation of Settlement on (T+2) @11:00 am. Financial Penalty Suspension from Trading (allowed to sell only)

CSD Brokers Services … cont

5. Prepare different types of reports upon Brokers request.

6. Correction of deals executed by mistake.

• Fees (0.003*number of shares*price of deal)

7. Transfer of Settlement amount from one bank to another.

8. Transfer of pledged securities to Broker for sale.

9. Conduct training programs for new brokers.

10. Freeze and Release of pledged securities.

1. Issuing a share book.

2. Issuing reports upon request.

3. Amending shareholders information.

4. Receiving share certificates on behalf of listed companies.

5. De freezing share certificate ( Dematerialization ).

CSD Listed Companies Services

CSD Listed Companies Services … cont

6. Providing listed companies with subscription service in different types of reports.

7. Applying all types of corporate actions on shareholders accounts.

8. For sub-listed companies, applying the instructions of depositing and withdrawing shares.

For depositing the shares the instruction has to come for the company's registrar.

For withdrawing the shares the investor gives the instruction in writing.

9. Customizing reports for listed companies upon their request.

10. Providing sub-listed companies with monthly reports that shows all activities took place during the past month for their shareholders.

11. Sending a free share books annually at the end of the year.

12. De-freezing shares on behalf of listed companies.

13. Providing listed companies with reports that shows all Pledge Details at the time of Corporate Action.

CSD Listed Companies Services … cont

1. Issuing investor numbers.

2. Transfers.

3. Send Daily Reports about custodian clients trade details (without fees).

Settled Securities Report Traded Securities Report Trades by Custodian Investor Balance for Custodian Investor Position for Custodian

4. Customizing Reports upon their request (with fees).

5. Transfer of Settlement Obligations to Broker:

CSD Custodian Services

Thank You

Questions