Abu Dhabi, Manama bourse to list ETFs in 2009

ETFs are investment vehicles that hold assets such as stocks or bonds and trade at almost the same price as the net value of its underlying assets over the course of the trading day.

The Abu Dhabi Securities Exchange (ADX) plans to list at least two local and two foreign ETFs by early 2009, its top executive said, while Manama's securities market is aiming to launch ETFs in the first half, a Bahraini official said.

"We see wide ranging investment opportunities, especially during market downturns and ETFs are likely to attract long-term foreign institutional investors to the region," Tom Healy, CEO of ADX said at an ETF Investment Conference.

"Towards the end of this year or at latest, early next year, we will be listing our first ETF from domestic banks. There's also significant interest from Taiwan, Japan and Pakistan," he said.

ADX is in advanced talks with some local banks and some of them could be major players in structuring and launching ETFs, said Elie Ghanem, head of market & product development at ADX.

"The regulations are ready and we are about to finalise our internal tests on the platform," he said, adding ETFs are ideal for individual investors to diversify risk at low cost and for savvy investors who wish to hedge.

Bahrain plans to list its first ETF in the first half of 2009 as part of its strategy to offer new investment options, said Ebrahim Al Aradi, head of trading at the Bahrain bourse.

"We are working on the regulations, ETFs are needed for our exchange and investors," he told Reuters.

Globally, at the end of the third quarter, there were 1,499 ETFs with 2,494 listings with assets valued at $764.08 billion according to Barclays Global Investors Ltd.

The assets in fixed income and commodity ETFs grew significantly while assets in equity ETFs declined considerably, said Deborah Fuhr, head of ETF research at Barclays Global.

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