The UAE State-owned enterprise, Abu Dhabi Development Holding Company (ADQ) has launched Q Market Makers (QMM) which commenced trading on Abu Dhabi Securities Exchange (ADX).
ADQ introduced market makers as key market participants who provide highly effective means for smooth trading activity and ensuring liquidity in a strong securities exchange.
A highly liquid exchange creates interest and trust in capital markets bringing order flow and listings. Further, the prices will turn more efficient with lower transaction costs leading to higher volumes driven by narrow average spreads. It will give a reliable platform for companies to raise capital and to broaden and diversify their shareholder base.
Mohamed Ali Al Shorafa Al Hammadi, Member of the Abu Dhabi Executive Council and Chairman of ADX says that the exchange is aiming to enable more participation in the securities market to increase liquidity by encouraging capital formation and economic growth.
A liquid and efficient capital market is extremely necessary for any country to attain economic diversification as well as to support its business environment to become competitive and engaging with the global economy.
Al Hammadi stated that Market making is an important tool for the growth of financial market and trading and further added that, “the launch of Q Market Makers is a significant milestone for the Abu Dhabi Securities Exchange, paving the way for increased market activities at all levels.”
“The establishment of QMM brings together a combination of highly specialized expertise, innovative technology and capital deployment for the benefit of listed companies and their shareholders alike. As an additional market maker for ADX, QMM will help to boost liquidity and improve the market quality of Abu Dhabi’s state-of-the-art exchange.”
The QMM of ADQ targets to increase economic activities that are backed by a prominent capital market that aids in the Emirate’s developments.
For the smooth delivery of QMM’s activities as an independently managed market maker, it will be allowed to access funding reserved for market-making in Abu Dhabi Economic Stimulus Package announced early this year. The Abu Dhabi Government setup this tool under Ghadan 21 to enhance liquidity.