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Dubai Financial Market Company (PJSC) today announced its results for the financial year ending 31 December 2019, posting a net profit of AED 120.6 million, compared to AED 125.5 million in 2018, a 4% decline. Total revenues reached to AED 315.8million in 2019 compared to AED 324.7 million in 2018. The total revenue comprised of AED 177 million of operational revenues and AED 138.8 million of investment revenues and others. Company expenses reached AED 195.2 million during 2019 compared to AED 199.2 million in 2018.
Total revenue of the Company during the fourth quarter of 2019 increased 2% to AED 74.2million compared to AED 72.8 million during the corresponding period of 2018. The net profit of the period increased 15% to AED 25.1 million compared to AED 21.8 million in the last quarter of 2018.
During its meeting on Sunday, 9 February 2020, the Board of Directors reviewed and approved the annual results ahead of that will be submitted for ratification during the Annual General Meeting of the Company that will be held based on the approval of the Securities and Commodities Authority (SCA). The Board of Directors also proposed a cash dividend of AED 200 million equivalent to 2.5% of the Company’s capital.
Structural development plan and business excellence
Commenting on the key developments and achievements of 2019, His Excellency Essa Kazim, Chairman of the Company said, “During 2019, the DFM continued to lead the way in the development of the UAE’s financial markets, through the implementation of a substantial part of its structural development plan by establishing independent depository and clearing companies, thereby taking corporate excellence in the market to new levels. The DFM also implemented several projects in line with its 2021 strategic plan, aimed at enhancing market competitiveness and diversification of product offerings and services in order to better position the market for sustainable growth. In 2019, the DFM launched the new post-trading services organizational structure aiming to separate trading activities from post-trading services in line with international best practices. A significant part of the reorganization plan has been completed, including licensing the Dubai Central Clearing & Depository Holding (DCCD) L.L.C., a holding company for post-trading services with two companies under its umbrella, namely: Dubai Central Securities Depository (Dubai CSD) (L.L.C.) and Dubai Clear (L.L.C.). We officially received the regulatory license from the Securities and Commodities Authority (SCA) to incorporate Dubai CSD (L.L.C.), as the first independent company for central securities depository services in the UAE. With regard to Dubai Clear (L.L.C.), the central counterparty company, it is due to commence operations in the year 2020 upon receiving the regulatory approval from the SCA.”
Enhancing regulations to encourage IPOs
“The DFM is actively participating in the development of financial markets’ regulatory and legislative infrastructure in cooperation with the concerned entities, including the Ministry of Economy, the SCA and other related bodies. We are working to encourage family and private businesses to avail the advantages of the financial markets, which ultimately strengthens DFM’s position as the most favored listing venue. Based on our active communications with these companies, we anticipate a revival in the Initial Public Offering (IPO) sector, as a result of the many amendments and enhancements made during the past period,” he added.
Diversification of product offering and asset classes
Commenting on DFM’s efforts to diversify product offering and asset classes, H.E. Essa Kazim said: “We are accelerating efforts towards launching the first platform of its kind globally for share trading of free zone companies. The upcoming platform is part of the Dubai 10X Plan and developed in collaboration with leading strategic partners including; The Dubai Airport Free Zone Authority (DAFZA), the Securities and Commodities Authority (SCA) and the Supreme Legislation Committee in the Emirate of Dubai (SLC). It will enable free zone companies representing various economic sectors to leverage the advantages of listing on DFM. Additionally, we have completed preparations to launch the Real Estate Investment Trusts (REITs) platform, which will be an important addition to the list of traded financial tools considering the significant presence and global reputation of Dubai’s real estate sector.”
Performance indicators
With regards to the market performance, H.E. Essa Kazim said: “The DFM General Index has increased by 9.3% during the year 2019 and despite the 12.5% decline in trading value to AED 53 billion, the market remained attractive to foreign investment. Foreign investors’ transactions generated net purchases of AED 2.824 billion and they acquired 49.6% of market activity, with an ownership of 17.35% of total market capitalization. On the other hand, institutions’ ownership of total market capitalization reached 83.6% at the end of 2019, with a 54.2% share of the total trading. The DFM registered 3067 new investors, lifting its investor base to 844,455 investors.
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