Dubai Financial Market creates new classification

The "More Active" category will allow share prices to move up or down by a maximum of 15 per cent during one trading session. This is the current restriction for all shares trading on the DFM.

The new "Less Active" category will allow price movement of up to five per cent in either direction.

The move comes as part of DFM's efforts to maintain a healthy exchange and market, and to ensure greater stability in the market index. The new system will start from April 1, 2006.

Listed companies will be evaluated every six months in compliance with a set of market standards. The Standards are:

• The total traded volume of a security should not be less than one per cent of the total traded volume of the market during the six month period
• Total traded volume of a listed company should not be less that 10 per cent of its total shares the six month period.
• Companies should be listed on the Dubai Financial Market as a primary market.
• Number of days on which a company's shares are traded should be at least 50 per cent of the total trading days during the six month period.
• The number of trades in a company's shares should not be less than 150 transactions during the six month period.
• The number of traded shares should not be less than 500,000 shares during the six month period.
• The total traded value of shares should not be less than AED100 million during the six month period.

Foreign companies that have their shares listed on the DFM as a secondary market, will be automatically classified under the "More Active" category.

Companies that do not meet these standards will be classified under the "Less Active" category, and therefore subject to the 5% price movement limit.

In a separate move, the management of DFM has launched a feasibility study into the possibility of setting a minimum number of shares per trade.