UAE raises daily decline limit in shares back to 10% from February 28

The daily decline limit for stocks listed on the UAE’s bourses has again been increased to 10 per cent from the current 5 per cent, it was announced on Wednesday.

The development, effective from February 28, comes in implementation of a cabinet decision, official news agency WAM reported.

In March 2020, the Securities and Commodities Authority had reduced the daily limit from 10 per cent to 5 per cent in order to contain the fluctuations triggered by the Covid-19 pandemic. However, the 15 per cent up cap was kept unchanged.

The new cap means that share prices of each listed company can now drop by a maximum of 10 per cent of the last closing price per day.

Hassan Al Serkal, CEO of Dubai Financial Market (DFM) said: “The reinstatement of the ordinary limit down cap underscores DFM’s resiliency in containing international markets’ volatility triggered by the Covid-19 pandemic.

“Various market performance indicators have improved, for instance the General index had jumped 56 per cent from its April 2020 lowest point registered within the context of a volatile global markets’ backdrop at the time. Additionally, the total traded value increased by 24 per cent to reach Dhs66bn in 2020, which underlines the confidence of local and international investors.”

DFM also registered 4,027 new investors last year, including  2,350 foreign investors, Al Serkal added.