UAE sets new limit of 5% for stocks' daily drops as of Wednesday

Electronic boards displaying stock information are seen as investors look on on the floor of the ADX Abu Dhabi Securities Exchange stock market [Twitter]

Shares in the United Arab Emirates stock exchanges starting from Wednesday will be allowed to drop a daily maximum of 5% from their previous day closing price, state news agency WAM reported.

It cited a decision by the UAE’s Economy Minister Sultan bin Saeed al-Mansouri as saying the stock market could increase the limit to 7% for select stocks based on criteria that need to be approved by the Securities and Commodities Authority (SCA). The minister is also the chairman of SCA.

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The decision is valid as of Wednesday’s trading session until further notice from the authority, it said.

Stocks were allowed a daily 10% drop earlier.

The decision comes amid market volatility in regional markets due to the impact of the coronavirus outbreak and plunging oil prices.

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