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Dubai Financial Market Investor Presentation 2012. i. CONTENTS. MENASA Region : Macroeconomics ……………………….1 Dubai : Middle East’s Financial Hub……………………….5 UAE Capital Markets : DFM / ND / ADX……………………….9 Two Exchanges, One Market : DFM & ND……………………....14

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Dubai financial market investor presentation 2012

Dubai Financial Market

Investor Presentation 2012


Dubai financial market investor presentation 2012

i

CONTENTS

MENASA Region : Macroeconomics ……………………….1

Dubai : Middle East’s Financial Hub……………………….5

UAE Capital Markets : DFM / ND / ADX……………………….9

Two Exchanges, One Market : DFM & ND……………………....14

Corporate Strategy : Going Forward……………………....24

www.dfm.ae


Dubai financial market investor presentation 2012

THE REGION – MENASA / GCC/ UAE

AN ECONOMIC POWERHOUSE


Dubai financial market investor presentation 2012

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MENASA REGION :

SOLID ECONOMIC FUNDAMENTALS

-PROMISING GROWTH

Oil Reserves and Production (% of Global Total)

Population Projections

29% of Global Population

MENASA region is emerging as a powerful economic bloc with tremendous growth potential, combining the sovereign wealth funds (SWFs) of the Mena region to the economic growth story of, say, India, hence, the economic paradigm shift towards this region from other emerging markets

Iran

GDP 2012 (USD Millions)

FDI Projections 2006 - 2013

7% of global GDP

Source:

IMF, World Bank

www.dfm.ae


Dubai financial market investor presentation 2012

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GCC REGION :

LIQUIDITY ON THE BACK OF HIGH OIL PRICES –

KEY EMERGING MARKET

The UAE, the second biggest Arab economy, is set to record 4% growth in GDP in 2013, led by a focus on adopting industrial policies that will drive sustainable development across the UAE.

-IMF 2013 Forecast

GCC – GDP Projections 2010 - 2013

GCC – Country Ratings 2011-12

Region was able to quickly recover from the global crisis on the back of strong fundamentals and high oil prices

Iran

GCC Ranking 2011-12

GCC – FDI Share by Country 2011-12

GCC region rated most promising region under WEF & World Bank rating

GCC region accounted for US $ 70 Bn of FDI funds inflow

25th 30th

26th 39th

32nd 80th

36th 99th

Source: IMF, World Bank

www.dfm.ae


Dubai financial market investor presentation 2012

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UAE:

GROWTH PROSPECTS

Oil / Gas as % of GDP (2012)

  • Recovery in oil prices

  • Strong growth in the non-hydrocarbon sector

  • UAE’s service driven economy benefitting from the global trade

  • USD 50 billion worth of infrastructural projects still under construction in UAE

Key Contributors

to Growth

UAE Import/Export Projections

(% Growth)

Exports

Imports

Source: Dubai Chamber of Commerce

www.dfm.ae


Dubai financial market investor presentation 2012

DUBAI

THE FINANCIAL HUB OF MIDDLE EAST


Dubai financial market investor presentation 2012

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DUBAI:

VISION & ECONOMIC STRENGTHS

“Our vision is clear, our goals are obvious, our strengths are great, our will is strong and we are ready. We want Dubai to be a global center of excellence, creativity and leadership”.

-HH Sh. Mohammed

Ruler of Dubai

Well diversified economy based on international trade, banking and finance, tourism, information technology and infrastructure.

Dubai GDP Share Breakdown by Economic Sectors – 2011

Dubai’s core strengths remain fundamentally sound

www.dfm.ae

Source : Dubai Chamber of Commerce


Dubai financial market investor presentation 2012

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DUBAI:

RECENT EVENTS

  • Organizational restructuring of government departments & related entities

  • Successful debt restructuring across all sectors with zero defaults

  • GDP is projected to grow at 4% and above going forward, as per IMF, way above the average GDP growth of western counterparts

Seems like the stars are aligning for Dubai once again

While challenges remain, the Dubai economy is on a much sounder footing especially as much of the excesses and speculative elements of the economy have been weeded out. What Dubai is now left with is an unparalleled logistics, commercial, retail, communications and transportation infrastructure in the region - and ready for business in a region that is sitting in a fresh pile of cash thanks to high oil prices.

www.dfm.ae


Dubai financial market investor presentation 2012

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DUBAI:

GROWTH PROSPECTS

Globally fast growing industrieswith a strong position in Dubai

Financial services

Tourism

Trade

Oil and gas

Professionalservices

Globally fastergrowing sectors

Communication

Transportation and storage

Future globalgrowth

2010– 2015

Manufacturing

Average globalGDP growth

Construction

Electricity/Water

Agriculture

Globally slowergrowing sectors

Governmentservices

Very weak

Average

Strong

Dubai’s strength by international standards

Sectors qualified to be part of futuregrowth path

www.dfm.ae

Source : DSP 2015


Dubai financial market investor presentation 2012

CAPITAL MARKETS

UNITED ARAB EMIRATES


Dubai financial market investor presentation 2012

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CAPITAL MARKETS:

KEY EXCHANGES IN THE REGION

Istanbul Stock Exchange

Tunis Stock Exchange

Algiers Stock Exchange

Casablanca Stock Exchange

Damascus Stock Exchange

Beirut Stock Exchange

Iraq Stock Exchange

Palestine Stock Exchange

Tehran Stock Exchange

Amman Stock

Exchange

Kuwait Stock Exchange

Libya Stock Exchange

Egypt Stock Exchange

Qatar Exchange

Karachi Stock Exchange

Tadawul

Muscat Stock Market

Sudan Stock Exchange

Cash & Fixed Income Equity, Index & Commodity Futures

Only UAE offer a wide array of trade exchanges/products in the entire MENA region

www.dfm.ae


Dubai financial market investor presentation 2012

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MARKET CAPITALIZATION

LIQUIDITY REVIEW

END-OF-PERIOD MARKET CAPITALIZATION

(2001 –2012)

DFM / ND Breakdown - 2012

USD Billion

DFM / ND Markets Breakdown

(USD Bn)

www.dfm.ae

Source : DFM/ND Analytics


Dubai financial market investor presentation 2012

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TRADE VALUES :

DFM PERFORMANCE

TRADED VALUE - DFM

(2001 – 2012 )

Trading volumes have picked up in 2012 with 2012 recording a growth of 52% over 2011.

www.dfm.ae

Source : DFM/ND Analytics


Dubai financial market investor presentation 2012

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MARKET VELOCITY

DFM PERFORMANCE

VELOCITY

(2001 – 2012)

www.dfm.ae

Source : DFM Analytics


Dubai financial market investor presentation 2012

DFM / NASDAQ DUBAI

TWO EXCHANGES, ONE MARKET


Dubai financial market investor presentation 2012

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UAE MARKETS :

REGULATIONS & OWNERSHIP

Regulatory Authorities

SCA

(UAE Regulations)

DFSA

(International Regulations)

Stock Exchanges

Government

of

ABU DHABI

33.33%

19.9%

79.62%

100%

1%

66.67%

Ownership Structure

19.38%

Public Stake

www.dfm.ae


Dubai financial market investor presentation 2012

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DFM : GENERAL INDEX

YTD PERFORMANCE

INDEX PERFORMANCE

-- 2011 -- 2012

19.9% Index growth in 2012 as compared to 2011

1622.53

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM : TRADING PROFILES

RETAIL VS. INSTITUTIONAL MIX

2012 – TRADING ACTIVITY PATTERN

AVERAGE RETAIL TRADING = 75.47%

Trading Activity : Client type Mix

AVERAGE INSTITUTIONAL TRADING = 24.53%

TRADING ACTIVITY BY CATEGORY

2012 has been a stabilizing year with institutional investor trading averaging to 24.5%. Key reasons and major setback is attributed to MSCI upgrade which is still pending

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM : TRADING ACTIVITY

LOCAL VS. FOREIGN INVESTMENT

UAE VS. NON UAE

TRADING ACTIVITY

NON UAE TRADING ACTIVITY

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM : TRADE MATRICES

SECTOR MIX

Trade Activity – By Sector

2012

* Includes Materials / Utilities / Consumer Staples

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM : OWNERSHIP

SHARE OWNERSHIP RATIOS

BY TYPE OF INVESTOR

BY NATIONALITY

Distribution of Share Ownership 2012

FOREIGN OWNERSHIP AS % OF MARKET CAPITALIZATION

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM : MARKET ACTIVITY

DFM SHARE PRICE

AED

DFM Share Price Movement

2012

AED 1.02

Trade Volume YTD 2010

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM :

REVENUE MIX

Revenue Breakdown

2008-2012

DFM is actively moving towards revenue diversification with 2012 witnessing 42% revenue from diversified portfolio

www.dfm.ae

Source : Reuters / DFM / ND Analytics


Dubai financial market investor presentation 2012

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DFM : INVESTOR-CENTRIC

ATTRACTIVE PLATFORM FOR LOCAL & INTERNATIONAL INVESTORS

DFM : INVESTOR-CENTRIC

ATTRACTIVE PLATFORM FOR LOCAL & INTERNATIONAL INVESTORS

  • Easy accessibility

  • No income and capital gains tax

  • Non-restricted repatriation of capital

  • Minimal foreign exchange risk

  • Foreign ownership allowed for most listed companies

  • Diverse base of listed companies

  • Local and international regulatory framework

  • Innovative trading capabilities

www.dfm.ae


Dubai financial market investor presentation 2012

CORPORATE STRATEGY

DFM – NASDAQ DUBAI


Dubai financial market investor presentation 2012

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STRATEGIC INITIATIVES

ADDRESSING FUTURE GROWTH

  • Getting upgraded to MSCI Emerging Market Status

  • G30 Compliance and addressing the gaps

  • Organizational restructuring and monetization of financial services

  • Initiating investor –centric services to increase liquidity and trading activities post merger

  • IPO focus and listings

www.dfm.ae


Dubai financial market investor presentation 2012

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STRATEGIC INITIATIVES

MSCI UPGRADE

Key Features

Key criteria's for Emerging market status

DFM is ready and meets all eligibitly criteria's for MSCI upgrade to Emerging market status

www.dfm.ae

* Successful DVP implementation and introduction of SBL as part of G30 compliance


Dubai financial market investor presentation 2012

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STRATEGIC INITIATIVES

G-30 COMPLIANCE

Key Features

  • CHANGED

  • Permitting Local Custodians ability to reject cash and securities settlement of sell trades back to executing Broker for settlement if Local Custodians do not receive (matched) settlement instructions from clients – Local Custodians now have full control of assets [unnecessary to operate dual accounts].

  • Enhancing current rejection process for settlement of purchase trades;

  • Introduction of a Late Confirmation Period of T+4

  • Securities fails handling mechanisms which comprises:

    • Optional buy-in [between T+2 and T+3]

    • Mandatory buy-in by DFM on T+4.

    • Cash close out against the Local Custodian client [if mandatory buy-in against selling Broker by DFM fails on T+4].

    • Penalties for Late Confirmation.

UNCHANGED

T+2 settlement cycle;

Pre-validation of sell orders will be maintained.

This means a seller’s agent trading account with local custodian must have securities balances for pre-validation before a sell order can become a valid order.

Delivery Vs. Payment : Implementation

DvP methodology has been successfully implemented at DFM as of 2012

Reasons for adopting the changes

Reduce risk in Local Brokers having unlimited access to the Local Custodian Client Agent Trading Account.

Eliminate the requirement to use a dual account structure.

Progression in meeting international best practices under a pre-validation of sale market infrastructure.

Facilitate the achievement of Emerging Market status under the MSCI market classification.

www.dfm.ae


Dubai financial market investor presentation 2012

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STRATEGIC INITIATIVES

ORGANIZATIONAL RESTRUCTURING

New organizational structure

EXCHANGES

Key Growth Initiatives

  • Trading Enhancements

  • Margin Trading

  • Equity Swaps

  • Warrants

  • Enhanced Brokerage Services

  • iVESTOR Cards

  • Dividend Distribution

  • Market Data Feed

  • Web Advertizing

  • Online Subscription

  • IPO initiatives

  • e-Reports & e-Services

  • DVP

  • SBL

  • In-house IPO System

www.dfm.ae


Dubai financial market investor presentation 2012

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STRATEGIC INITIATIVES

PIONEERING IPO STUDY

DFM

has commissioned Independent Research Consultants

for

intensive

IPO

study

  • The following initiatives have been taken so far:

  • The following initiatives are currently planned:

  • Publication of the ‘Guide to going public’

  • Event hosted by DFM for the launch of the “Guide to going public” for top financial & legal advisors

  • IPO Market Study and meetings arranged with potential IPO candidates (E&Y)

  • DFM hosted high profile IPO information workshop for private, semi-government and family owned businesses

  • Approach the Free Zones in the Northern Emirates

  • Initiate talks with the DED & JAFZA

  • Initiate talks via the Dubai Chamber of Commerce

  • Nasdaq Dubai Initiative- Regional IPO Market Study and meetings to be arranged with potential IPO candidates.

www.dfm.ae


Dubai financial market investor presentation 2012

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STRATEGIC INITIATIVES

ROBUST ENVIRONMENT

FOR FUTURE LISTINGS

www.dfm.ae


Dubai financial market investor presentation 2012

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CONTACTS :

Racha Al Chamut

Manager, Investor Relations

P.O.Box: 9700, Dubai, UAE

Tel: +971 4 305 5650

Fax: +971 4 331 4924

[email protected]

Areej Al Saeed

Office Manager

Executive Chairman's Office

P.O.Box: 9700, Dubai, UAE

Tel: +971 4 305 5607

Fax: +971 4 331 4924

[email protected]

www.dfm.ae


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