Regulated short selling on the UAE's main markets must be introduced to shield investors from volatility and to attract more institutional money, says the chief executive of NASDAQ Dubai.
"The UAE should and can do short selling. It enables you to make money when the market is going down, and it gives all types of investor the ability to buy," said Jeff Singer, the head of Dubai's second bourse.
Short-sellers borrow and sell an asset, hoping to profit by buying it back later for less. NASDAQ Dubai already allows this but the Dubai Financial Market (DFM), which is a much more active index, and the Abu Dhabi Securities Exchange (ADX) do not. The Emirates Securities and Commodities Authority (SCA), the regulator that oversees the DFM and ADX, has prohibited the practice and has spoken out regularly against it because it can drive down the value of equities.
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