Dubai Financial Market, the Arab world's only listed exchange, will revise changes to the way it lists stocks, it said in an emailed statement on Sunday. In an abrupt u-turn, the bourse said only stocks worth less than 1 dirham would trade to three decimal places from March 11, instead of two today.
DFM said on March 4 stocks worth less than 10 dirhams would qualify for the above change. For securities valued above 10 dirhams, the minimum decimal fraction would have been reduced to 0.01 dirham from 0.05 dirham, but this amendment has also been put on hold.
The DFM offered no explanation for the u-turn and was not immediately available for comment, but some brokers have welcomed the decision to phase in reforms more gradually.
"It's a sensible move," said Mohammed Yasin, Shuaa Securities chief executive. "All the talk was about changing the tick system for stocks below 2 dirhams - that's where the most effect would be - to go to three decimal places for stocks near 10 dirhams is too much."
He said brokers' order systems would be adapted to trade to three decimals and so any other changes the DFM later chose to make would be simple to apply. Around a quarter of the DFM's stocks ended Sunday at less than 1 dirham, so under the current system these stocks move a minimum 1 percent. Day traders' favourites such as Union Properties and Deyaar are valued at less than 0.5 dirhams, so move a minimum 2 percent up or down, increasing volatility.