SICO BSC (c), a regional asset manager, broker, market maker and investment bank, has been accredited to provide liquidity and act as market maker for companies listed on Dubai Financial Market (DFM). This will help create more dynamic two-way markets that will enhance the liquidity of companies listed on the exchange and result in benefits for investors and stocks of listed companies alike. The accreditation builds on SICO’s status as the leading market maker on the Bahrain Bourse since 1995, reinforcing its position as a pioneer and key player in GCC financial markets. It also follows the admission of SICO as the first-non-UAE based registered market maker and liquidity provider at Abu Dhabi Securities Exchange (ADX) last month.
As market maker and liquidity provider, SICO, which is also a major participant in UAE markets through its Abu Dhabi-based subsidiary, SICO Financial Brokerage LLC, will help narrow the spread between bids and offers, and encourage further trading. SICO’s functions will include making bids and offers for shares available, identifying the volumes required for buying and selling, and finding the balance price for securities on the DFM.
DFM registered SICO in line with guidelines issued by the UAE’s main financial regulatory body, the Securities and Commodities Authority (SCA), which stipulates that the ownership of a liquidity provider cannot exceed 5% of the listed company’s shares and that issuers have the right to assign multiple liquidity providers.
Commenting on the accreditation, Ms. Najla Al Shirawi, CEO of SICO noted:
SICO is delighted to be licensed as market maker and liquidity provider on this important market, and to be bringing our considerable expertise to them. We look forward to assisting listed companies to improve valuations and attract fresh capital, which will further enhance the confidence of regional and international investors.
Over the past two decades, SICO has stayed ahead of the curve by offering sophisticated financial solutions and continually updating its offerings. As the first approved market maker on the Bahrain Bourse, SICO has made a significant impression on market liquidity and boosted the bourse’s average daily traded value. The Bahrain Liquidity Fund, which was co-seeded by SICO in June 2016, has contributed to the increase of the bourse’s turnover since its inception by 150%.
Mr. Hassan Al Serkal, Chief Operating Officer (COO) and Head of Operations Division of DFM said:
We are delighted to welcome SICO to DFM’s market making and liquidity provision members. This step is part of our efforts to cooperate with market participants in order to create value for issuers, brokers and investors alike. Through its momentous journey, the DFM has strengthened its leading position amongst regional exchanges by implementing international best practices. Accordingly, the DFM launched the market making and liquidity provision service in 2017 and it currently includes 4 companies enabling listed companies to enhance liquidity of shares and achieve buy/sell balance through mutual agreement with the service provider.
SICO launched and co-seeded the BHD 41 million (AED 403.3 million) Bahrain Liquidity Fund with the aim of enhancing and deepening the Kingdom’s stock market. Since its launch, the Fund has made a sizable impact on daily traded value and turnover on the Bahrain Bourse, more than doubling the its average daily traded value in just one year from BHD 260,000 (AED 2.56 million) per day in 2017 to BHD 572,000 (AED 5.6 million).
SICO is currently the Market Maker on Bahrain Bourse for Aluminium Bahrain, GFH Financial Group, Eskan Bank REIT, and Bank ABC, which are among the most highly traded entities listed on the exchange.