Thursday 08, June 2017 by Georgina Enzer

Al Ramz Capital is a liquidity provider for Gulf Navigation Holding

Al Ramz Capital, a subsidiary of Al Ramz Corporation Investments and Developments PJSC, has been appointed as a Liquidity Provider for Gulf Navigation Holding’s shares after obtaining the necessary approvals from Dubai Financial Market and signing the agreement on 3 May 2017.

"Since Al Ramz Capital has obtained the licence of the market maker and the liquidity provider, we immediately activated the product by signing several agreements" commented Mohammed AlMurtada Al Dandashi, Managing Director of Al Ramz Corporation. "This is a testament to the company's continued leadership and growth in line with the development of the capital markets and investment products. Without a doubt, the neutral role of the liquidity provider enhances the efficiency of the capital markets and contributes gradually in reducing the average capital cost of equities on listed companies as well as those seeking to be listed. We also commend here the importance of the role of the liquidity provider and market maker towards attracting the institutional and international investors in capital markets which will support the depth of trading. We are proud to cooperate with Gulf Navigation Holding, which confirms the confidence of investors and listed companies in Al Ramz."

A liquidity provider is appointed by a company with the sole objective of enhancing the liquidity of the underlying shares and increasing the frequency of transactions. The Liquidity Provider is independent of the company and has complete autonomy over trading. The LP will transact within pre‐defined parameters that are agreed with the company. Some of the potential benefits to the issuer are an increase in price stability, lower trading costs, a reduction in the bid/ offer spread and the potential to increase the valuation metrics.

Galen Moore, Head of Market Making and Liquidity Provision said “This is a significant milestone in the redistribution of liquidity across the UAE stock exchanges and another example of Al Ramz being at the forefront of the development of the Capital Markets in the region. By providing both bids and offers in Gulf Navigation Holding investors can avoid liquidity traps where investors are unwilling or unable to trade due to increased volatility.”

Al Ramz Capital will perform its duties as a liquidity provider through a specialised department, which is made up of equity professionals with over 30 years equity market experience between them. This department will determine the optimal liquidity level of the company's shares, given the market price and underlying supply and demand observed. The Liquidity Provider will also be responsible for maintaining a tight spread between bids and offers, which will in turn provide investors with optimal entry and exit price levels in order to better manage their portfolios. It is important to emphasise on the vital role of the liquidity provider and market‐maker to follow‐up closely on the company’s financials and economic situation to determine the required price levels for the balance of trading according to the best standards to reduce liquidity risk, which will directly affect the process of equity valuations.

"Gulf Navigation Holding is always at the forefront of all possible initiatives to safeguard the interests of all shareholders. Gulf Navigation Holding has appointed Al‐Ramz Capital to act as a liquidity provider to enhance the share’s liquidity and increase the trading activities on the share in conjunction with the tremendous developments witnessed by Gulf Navigation Holding recently and the future plans and goals that the company aspire to achieve in the coming years " said Khamis Juma Buamim, Managing Director and CEO of Gulf Navigation Holding."

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