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The weight of equity of First Abu Dhabi Bank, FAB, accounted for 37 percent of Abu Dhabi Securities Exchange's total equity weight by the end of May, with the bank, which is listed under the NBAD ticker, weighing 0.65 percent at MSCI Emerging Market Index and around 1.02 percent at Bloomberg GCC Index, according to FAB data presented to senior investors.
The revelation of the bank's equity weight came in the wake of the changes undergone by the share on the back of the April's merger of the National Bank of Abu Dhabi and First Gulf Bank to create the region's largest banking entity.
As per ADX rules and regulations, the index value is calculated based on the free-float shares being traded, i.e. the equity weight of every listed company depends on the number of equities available for trading only, excluding other restricted shares held by government departments or company insiders during their trading ban period. Free-float shares is therefore important to potential investors because it offers insight into the company's stock volatility. Stocks with small free float tend to be more volatile because there are only a limited number of shares that can be bought or sold in the event of major trading developments. For the same reason, companies with larger free floats are generally less volatile.
FAB comes on top of UAE banks in terms of the number of free-float shares, estimated at around 7.3 billion equities, which explains the increased liquidity available over the past two months.
According to ADX statistics, transactions worth AED1.5 billion were conducted over NBAD's share during April and May, namely immediately after the merger.
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