Al Ramz executes CCS using SLB
ABU DHABI/October 15: Abu Dhabi Securities Exchange (ADX) made a big leap in securities trading as Al Ramz Capital has executed the first Covered Short Selling (CSS) using the Stock Lending and Borrowing (SLB) facility on the exchange.
The chairman of ADX, Mohamed Ali Al Shorafa Al Hammadi said the launch of the CSS service is part of the exchange’s strategy to support the diversification of investment tools and providing investors with a broader range of hedging mechanisms.
Al Ramz Capital a subsidiary of Al Ramz, a Dubai Financial Market (DFM) listed company that offers a variety of financial products and services including asset management, corporate finance, market making, liquidity providing, brokerage, IPO management and research.
Stock Lending and Borrowing (SLB) allows investors to enhance yield of long-term holdings by lending securities to borrowers for an annualised fee while retaining all the rights of holding the securities.
SLB also facilitates covered short selling allowing investors to hedge portfolios. Al Hammadi hailed Al Ramz for executing the first Covered Short Selling and Stock Lending and Borrowing deal on ADX.
Short selling to drive liquidity
“By allowing short selling, the exchange will attract a new segment of specialised and experienced investors, driving both liquidity and trading volumes,” Al Hammadi said.
He added that ADX is continually developing the services it provides to investors and stakeholders alike, and continues its efforts to develop and launch strategic initiatives.
This is done in order to enhance the UAE’s investment structure and support its sustainable economic development, as part of ADX’s mission to contribute to further development of the economy of the Emirate of Abu Dhabi.
Dhafer Sahmi Al-Ahbabi, Chairman of Al Ramz said stock lending and borrowing provides investors the opportunity to enhance the return on long-term holdings while simultaneously providing other market participants hedging and shorting solutions.