Some shares may be allowed to drop as much as seven per cent/Bloombergby Kudakwashe Muzoriwa
The UAE has imposed a five per cent daily lower fluctuation limit for shares as markets in Dubai and Abu Dhabi joined a global rout.
In a statement, the Abu Dhabi Securities Exchange said that it has slashed the maximum daily decline percentage for the shares of companies listed on the exchange from 10 to five per cent until further notice from the Securities and Commodities Authority (SCA).
SCA said that some shares may be allowed to drop as much as seven per cent for a limited number of shares for some chosen companies.
HE Khalifa Salem Al Mansouri, Chief Executive of ADX, said, “The decision to reduce the maximum daily decline in the shares of companies listed in the market is in line with solid principles of rebalancing trade so that trading activities are less impacted by the current global viral outbreak.”
Similarly, the Dubai Financial Markets (DFM) also said that it was amending the limit down cap of listed companies while maintaining the limit up cap at its current level, 15 per cent.
HE Essa Kazim, the Chairman of the Dubai Financial Market, said, “The DFM will observe the implementation of the new fluctuation band to take any potential measures and amendments in line with the market circumstances.”
The decision is in the interest of protecting the savings of individual investors, the wealth of shareholders and in preserving institutional investment funds.