While running the International Petroleum Exchange in the late 1990s, Lynton Jones frequently visited oil-producing Gulf states to promote the London-based bazaar. Now he’s back in the region to tout a homegrown market, Dubai’s soon-to-be-launched International Financial Exchange. “There’s no significant financial center between Singapore and Europe,” points out Jones, 59. “There’s a vast amount of wealth in the Middle East, primarily invested in Western markets. We’ve got an opportunity to repatriate some of that capital to the Middle East.”
Jones, who created Nasdaq’s London office in the late 1980s and more recently headed short-lived electronic exchange Jiway, has taken his first big step since becoming chairman of the Dubai exchange last year by making a deal to link it with European markets. Under a memorandum of understanding signed last month, Paris-based Euronext will provide its electronic trading system to Dubai in time for the opening early next year.
Jones picked Euronext over Deutsche Börse and the London Stock Exchange because of its cross-border reach in Europe. “What we were primarily looking for was connectivity to Western markets,” he says.
That still leaves Jones in need of stocks to offer. He figures he must list at least five local companies in the first year, and he’s relying on the Dubai government’s pledge to privatize some of its holdings to get him started. One obvious candidate: national airline Emirates, which plans to list its bonds on the Dubai bourse. Further afield, Jones hopes to lure companies from India, Pakistan and South Africa, with the aim of achieving 30 to 40 listings within four years. “We have to demonstrate to the region as a whole that this is a market that’s working,” he says.
