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SICO BSC has been accredited to provide liquidity and act as market maker for companies listed on Dubai Financial Market, DFM. This will help create more dynamic two-way markets that will enhance the liquidity of companies listed on the exchange and result in benefits for investors and stocks of listed companies alike.
The accreditation builds on SICO’s status as the leading market maker on the Bahrain Bourse since 1995, reinforcing its position as a pioneer and key player in GCC financial markets. It also follows the admission of SICO as the first-non-UAE based registered market maker and liquidity provider at Abu Dhabi Securities Exchange, ADX, last month.
As market maker and liquidity provider, SICO, which is also a major participant in UAE markets through its Abu Dhabi-based subsidiary, SICO Financial Brokerage LLC, will help narrow the spread between bids and offers, and encourage further trading. SICO’s functions will include making bids and offers for shares available, identifying the volumes required for buying and selling, and finding the balance price for securities on the DFM.
Commenting on the accreditation, Najla Al Shirawi, CEO of SICO, said, "SICO is delighted to be licensed as market maker and liquidity provider on this important market, and to be bringing our considerable expertise to them. We look forward to assisting listed companies to improve valuations and attract fresh capital, which will further enhance the confidence of regional and international investors."
She added, "As the first approved market maker on the Bahrain Bourse, SICO has made a significant impression on market liquidity and boosted the bourse’s average daily traded value. The Bahrain Liquidity Fund, which was co-seeded by SICO in June 2016, has contributed to the increase of the bourse’s turnover since its inception by 150 percent."
Dubai Financial Market registered SICO in line with guidelines issued by the UAE’s main financial regulatory body, the Securities and Commodities Authority, which stipulates that the ownership of a liquidity provider cannot exceed 5 percent of the listed company’s shares and that issuers have the right to assign multiple liquidity providers.
In turn, Hassan Al Serkal, Chief Operating Officer and Head of Operations Division of DFM, said, "We are delighted to welcome SICO to DFM’s market making and liquidity provision members. This step is part of our efforts to cooperate with market participants in order to create value for issuers, brokers and investors alike. Through its momentous journey, the DFM has strengthened its leading position amongst regional exchanges by implementing international best practices. Accordingly, the DFM launched the market making and liquidity provision service in 2017 and it currently includes four companies enabling listed companies to enhance liquidity of shares and achieve buy/sell balance through mutual agreement with the service provider."
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