Dubai bridges the gap between East and West
Posted 15 November 2005
The Dubai International Financial Exchange opened for business
The Dubai International Financial Exchange (DIFX) opened for trading for the first time on Monday 26 September 2005.
The launch of the first truly international stock exchange located between Western Europe and East Asia took place at a ceremony at the Dubai International Financial Centre (DIFC), where the DIFX is located.
"The exchange will be a catalyst for economic growth and prosperity."
The DIFX aims to become the leading exchange in its region for equities, derivatives, bonds, funds, Islamic products, and other securities. It will be a gateway for international and regional investment.
It is the first exchange in its region that has been created to list securities from many different countries. It also aims to be the first to attract large numbers of international brokers, including some of the world’s biggest investment banks.
Dr Omar Bin Sulaiman, Director General of the DIFC Authority, owner of the DIFX , said, “This is a historic day for Dubai, the Middle East, and the entire region the DIFX will serve. The exchange will be a catalyst for economic growth and prosperity. It will strengthen the ties between the countries of the DIFX region, as well as between the region and the rest of the world.”
"The DIFX has been able to invest in the latest technology and, as a result, is highly automated, enabling it to act upon trades immediately."
The DIFX vision is to create a financial marketplace which will serve a region extending across the time zones between the financial centres of London and East Asia. The vision is to complete the global financial system – to fill the gap not covered by the international financial centres of Europe, the Far East, and North America. The region covered includes the Middle East and North Africa, as well as South Africa, Turkey, Central Asia, and the Indian subcontinent.
The DIFX communicates with its members over SWIFT for securities clearing, settlement and custody. According to Jean Paul Eulaers, Manager, Memberships, DIFX, incoming and outgoing messaging is currently based on SWIFTNet FIN, with a view to using SWIFTSolutions over time, including corporate action notifications to its members. Being a brand new exchange, the DIFX has been able to invest in the latest technology and, as a result, is highly automated, enabling it to act upon trades immediately.
"The DIFX will over the coming years achieve its aim of becoming one of the world's leading international exchanges."
SWIFT is used for money transfers, as well. The DIFX members use SWIFT messages to communicate with their cash settlement banks. In turn, these banks exchange money transfer messages with the DIFX cash clearing bank, Standard Chartered Bank. Eulaers stresses the fact that the DIFX is consulting its members to determine what to develop in terms of electronic services and the acceptance of other instruments.
The DIFX market opened with the listing of five Deutsche Bank securities. These are index tracking certificates, which cover the US S&P 500, the German DAX 30, the Japanese Nikkei 225, the EuroStoxx, and the Stoxx 50.
"We expect the DIFX to expand its use of SWIFT significantly in the next 12 months; not just for traditional messaging but with the use of new SWIFTSolutions for securities."
On 14 October 2005, the Lebanese mobile telecommunications company, Investcom, became the first company to list its shares on the DIFX. Its initial public offering was the first of 10 to 15 that the DIFX believes may be brought to its market by the end of 2006, by companies based in countries across its region and beyond.
Steffen Schubert, Chief Executive of the DIFX, said, “The opening of the DIFX, fully functioning and on schedule, is the result of many months of planning and hard work. The extraordinary support we are receiving from the Government of Dubai and the financial and business community shows this effort will reap rich rewards. The DIFX will over the coming years achieve its aim of becoming one of the world’s leading international exchanges.”
David Pryce, Director of SWIFT’s Commercial Channels and Developing Markets, SWIFT, said “The speed with which the DIFX has been created and launched is most impressive, and SWIFT is pleased to be supporting the endeavours of the DIFX in the region. We expect the DIFX to expand its use of SWIFT significantly in the next 12 months; not just for traditional messaging but with the use of new SWIFTSolutions for securities.”
To find out more about the DIFX and its offerings, go to www.difx.ae.