The UAE's financial markets are sound and their survival after the strong hits taken during the global financial crisis is a great achievement that should not be underestimated, according to a senior official. The recent upward movements of share prices and the return of foreign investors are strong evidence of the ability of the markets to withstand future financial shocks, said Dr Mounther Barakat, Senior Advisor and Head of Research and Financial Analysis at the Securities and Commodities Authority (SCA). "The recovery of the markets is not solely the result of interest from foreigners but also reflects the confidence of local investors in the growth of the UAE economy," he said.
The SCA was recently involved in organising forums for brokers on exchange traded funds (ETF). What are ETFs?
An ETF is an investment fund that represents a certain indicator whose units are traded on the financial markets. These funds can be classified according to the kind of investment tools that they contain. The indicators of most of these funds are the shares of companies listed on particular financial markets, while some contain investment commodities traded on commodity markets and others contain bonds. The emergence of ETFs dates back to the early 1990s. ETFs are traded by investors on the financial markets just like shares. The difference is the investor indirectly contributes to the ownership of the shares in the ETF according to the investment policy of the fund's manager and the percentage of shares in each of the ETF's units. By the end of the third quarter of 2009 the total value of assets held in ETF was $933 billion (Dh3.64 trillion) globally and the number of funds had reached 1,819, with 3,247 listings on more than 40 financial markets around the world.
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