The Abu Dhabi Securities Exchange (ADX) said yesterday it is still pushing ahead with an ambitious plan to introduce exchange trade funds (ETF) and the first ETF could be listed before the end of 2009.

ADX Deputy Chief Executive and Director of Operations Rashed Al Baloushi said the introduction of ETFs, the first in a regional bourse, had been planned in the first quarter of 2009 but had been held up by the global financial crisis.

"ADX is fully committed to the ETF market and working closely toward the successful creation of an adequate platform," he told Emirates Business. "But due to market conditions it has been postponed awaiting the global capital markets to bounce back hopefully before the end of this year."

ADX, one of the largest stock exchanges in the Middle East, had originally planned to launch ETFs in 2008 but regulators said they wanted first to educate investors on such advanced instruments and wait for an improvement of local and global markets before listing such funds.

ADX Chief Executive Tom Healy said recently four ETFs could be listed this year and dealers believe the first fund would be launched by the government-controlled National Bank of Abu Dhabi, the second largest UAE bank.

"ETFs have proved themselves to be popular with both retail and institutional investors and we would like to give investors the opportunity to trade ETFs on ADX," Baloushi said."Not only are they a way of diversifying, but they tend to be more cost-effective than mutual funds, as well as more accessible, flexible, liquid and transparent… ETFs are ideally suited to our retail-heavy market… they will give investors the opportunity to diversify therefore spreading their risks."

ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold. The ETF is part of overall plans by ADX to develop trading and turn itself into a market of global standards.

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