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DIFX to announce members and companies in Q2

First brokers, companies and members to be announced ahead of Q3 launch of exchange.

The first members, brokers and companies to be actively involved in the Dubai International Financial Exchange (DIFX) could be announced early in the second quarter of 2005 according the exchange's chairman, Lynton Jones.

Speaking at the Gulf Capital Markets conference in Dubai this week, Jones also said the exchange was working to launch trading operations early in the third quarter of the year. Asked how securities would be denominated he confirmed that the exchange had chosen to list its products in US dollars.

Although he wouldn't be drawn on which companies would be listed on the exchange, he said that they would almost certainly include some big local names as well as some regional companies, who would have their shares listed as depository receipts (DRs) in the new exchange. Emirates, the UAE's leading airline has already stated that it intends to list its bonds on the exchange.

Equity stocks will dominate the first phase of the exchange's launch, followed by bonds and regional DRs, but Lynton told delegates that the next phase of development will include launching derivatives. " Phase two will include derivative products such as futures and options because they were vital to the market-making aspect of any market," he said.

Dispelling rumours of how much free float companies will be required to issue, Jones said the DIFX has opted for a minimum free float of 25%, as well as being able to nominate share pricing of initial public offerings (IPO's). This compares to a minimum free float of 55% for companies registering IPO's on the Dubai Financial Market and Abu Dhabi Securities Market.

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