ADX calls for early release of reports

The Abu Dhabi Securities Exchange (ADX) has asked its listed firms to release their third quarter results early to avoid damaging rumours affecting share prices. In a nervous market atmosphere, it has written to all its listed companies to "encourage" them to get their results in earlier than the Nov 15 deadline and explain their business situation with regard to the credit crunch.

In a separate development, the Cabinet has authorised the bourse regulator to ease restrictions on share buybacks in an effort to boost stocks, after weeks of declines. The state news agency WAM said the move was meant to shore up share prices that have fallen due to negative sentiment from the global financial crisis, rather than the fundamentals of listed companies. The Dubai Financial Market gained 10.5 per cent today, its highest ever one-day gain, with the ADX doing almost as well at 6.9 per cent. Even the beleaguered banking stocks performed well. The National Bank of Abu Dhabi rose 9.8 per cent, Abu Dhabi Commercial Bank was up 9.43 per cent and First Gulf Bank rose 7.94 per cent. Both markets' banks and financial indexes rose by six per cent. Every other GCC stock market rose with the exception of Kuwait's, which fell by 0.26 per cent. The Saudi Tadawul, the largest exchange in the region, was up by 9.1 per cent.

In recent weeks a flurry of speculation has talked stocks up or down, most especially the banks, which are heavily represented on the ADX. The latest bank rumour was that Abu Dhabi Commercial Bank and National Bank of Abu Dhabi were in merger talks, although both companies denied it. "When markets are volatile, rumours can start to spread," said Rashed al Baloushi, the deputy chief executive and director of operations at ADX. "ADX is committed to the highest standards of transparency. We therefore want to do everything possible to ensure investors act on fact, not fiction."

Market sources said that the problem in such a retail investor-dominated market was that rumours could spread rapidly and be taken seriously by already panicked small shareholders. ADX took the view that the results needed to get out into the market fast, because more accurate information would benefit everyone. Few UAE companies announce the date that they will release their results in advance, unlike in many world markets.

Ali Khan, the executive director of Arqaam Capital, welcomed the move but said just releasing the results was not enough. "Equally important as the numbers would be guidance from the companies," he said. "There is no point reporting numbers without management giving guidance for the year." He added that even if the numbers were positive, bringing them forward may not help because they may be ignored by a market that is on the lookout for bad news.

afoxwell@thenational.ae