Abu Dhabi Securities Exchange (ADX) has distributed the first cash dividends on behalf of one of its listed companies through distributing the dividends of the shareholders of the Union National Bank on the Bank’s behalf. Thus, the Union National Bank became the first listed company in the United Arab Emirates to distribute the cash dividends through Abu Dhabi Securities Exchange.
ADX distributed approximately 550 million Dirhams to the shareholders of UNB, which is the value of the cash dividends that the Bank’s General Assembly has approved. The total number of shareholders in the Bank is 1058, 450 of which are UAE Investors, and 608 International Investors.
This step comes in line with Article 2 of Decision No.2 of the Securities and Commodities Authority’s Board of Directors for the year 2015 regarding the amendment of the Regulations as to Trading, Clearing, Settlement, Ownership Transfer and Custody of Securities which obligates the public joint stock companies that are listed in the financial markets to transfer the cash dividends of their shareholders to the bank account of the financial market. The market then deposits the cash dividends into the bank accounts of the shareholders within thirty days as of the date of the General Assembly’s/Board of Directors’ decision to distribute said dividends. By doing this, the listed companies stop sending the cash dividends to its shareholders through bank cheques, which was the same system used by the majority of companies. Please check with LC regarding the exact paragraph translation yet I think its ok
Following the Authority’s decision,, ADX took the initiative to implement an awareness campaign whose purpose was to encourage the investors to update their data and select their preferred dividends distribution mechanism which can be either issuing a cheque to the investor, or transferring the amount directly to the investor’s bank account. The Exchange remained in close contact with the investors through conducting awareness campaigns via various channels such as emails and the Exchange’s accounts on social media websites. A survey conducted by ADX on social media platforms revealed that 89% of investors who partook in the survey prefer to receive their cash dividends via direct bank account deposit.
Furthermore, the Exchange has made the updating of the investors’ data a compulsory step whenever a new transaction is requested. This led to a large number of investors to update their data, especially given the fact that such process is easy and can be done in many ways, whether through the Investors Electronic Services platform on the Exchange’s website, or through the accredited broker in the Exchange.
Mr. Jalal Khader, Advisor at Union National Bank, commented on this by saying: “We are delighted to collaborate with ADX and to be part of this advanced solution. The successful implementation of this service bears testament to UNB’s strategy to provide convenience and accessibility to all its customers using state-of-the art technological solutions”.On his part, Mr. Rashed Al Balooshi, CEO of ADX, stated: “We are also very happy to carry out such cooperative effort with the Union National Bank, and we congratulate them for being the first company in the UAE to distribute cash dividends through the Exchange”.
“The increase in the cash distributions’ distribution represents one of the most important incentives that help attract investors to ADX; cash distributions in some companies have reached 100% of the nominal value. Cash distributions play a major role in activating and stimulating liquidity movement on ADX where a large portion of it is re-pumped into the Exchange again”. Al Baloushi added.
Additionally, the CEO explained that ADX has strong companies that derive their strength from the strength of the country’s economy. Therefore, the distributions of the listed companies’ dividends reflect the integrity of its current situation and the healthiness of the local economy which relies on the diversification of its income resources and the reinforcement of the economic diversity system. The total value of distributions that have been approved in 2016 up until the end of the first quarter of the same year has reached approximately 21.6 billion Dirhams. Moreover, the profits of 49 companies listed on Abu Dhabi Securities Exchange, that have disclosed their audited financial statements, has reached around 40 billion Dirhams.
It’s worth mentioning here that as part of its efforts to promote its services and its listed companies on the international level and attract more foreign investment in its listed companies, Abu Dhabi Securities Exchange recently concluded its first promotional campaign for the year 2016 in the city of New York in the United States. Six of the Exchange’s listed companies partook in the campaign where approximately 80 participants from various international investment instituions were hosted by the Exchange; the total value of the Assests Under Management (AUMs) of those institutions are around 5 trillion USD. The said institutions participated in the event in order to learn about the opportunities and the investment climate in the Emirate of Abu Dhabi in general, and in Abu Dhabi Securities Exchange and its listed companies in particular.