The MENA region is emerging as a compelling yet complex landscape for global investors, marked by rapid economic growth, evolving regulations, and unique infrastructural challenges. Within this environment, how are technological upgrades in exchanges transforming the trading landscape? And, importantly, what hurdles still exist for those looking to establish a foothold in these burgeoning markets?
In advance of the upcoming TradingTech Summit MENA, a recent A-Team Group webinar entitled “Trade the Middle East & North Africa: Connectivity, Data Systems & Processes” explored these questions, with Rami El-Dokany, Secretary General of the Arab Federation of Capital Markets (AFCM); Seif Amr, Co- Founder & Chief Operating Officer, Thndr; Alastair Richardson, Global Business Development, Financial Technology at AMD; Steve Pope, Senior Fellow at AMD; and moderator Andrew Delaney, President and Chief Content Officer at A-Team Group.
From liquidity and regulatory shifts to the vital role of connectivity and latency, the panellists examined how MENA markets are preparing to meet global standards and capitalise on new opportunities for growth and innovation.The Appeal of the MENA Region for Global Investors
The discussion opened by looking at how, by offering both diversification and growth potential, the MENA region presents a unique appeal for international institutional investors. On the diversification front, MENA serves as a bridge between major economic blocs, such as the U.S./Europe and Russia/China. This positioning provides a rare opportunity for investors seeking exposure across various global markets while mitigating geopolitical risks. The UAE and Saudi Arabia have emerged as leading economic hubs, while Egypt remains one of the few large-scale, fast-developing markets, making the region highly attractive to investors aiming to spread their portfolio across dynamic economies.
In terms of growth, MENA stands out due to its young, increasingly wealthy population and a trajectory of rapid economic development. The region has seen a significant rise in dollar wealth over the past decade, contrasting with stagnation in some Western economies. Unlike the mature markets where innovation often requires novel solutions, MENA’s markets are still building fundamental industries, making it easier to identify and support emerging companies that address local needs. Additionally, there’s a robust ecosystem of venture capital-backed startups that have begun to mature, transitioning into private equity and public listings, signalling a development path similar to the U.S. in the early 2000s.
While an audience poll revealed that infrastructure costs and the complexity of establishing trading systems remain significant concerns for investors considering MENA markets, panellists noted that a well-established ecosystem akin to Western markets is still emerging in MENA, and incremental steps are necessary to overcome the financial and logistical hurdles of setting up comprehensive infrastructure. Businesses must adopt strategies that allow for gradual scalability in these markets, avoiding substantial up-front capital outlays.
Liquidity and Regulatory Landscape
One panellist described how the liquidity landscape in the MENA region, particularly for retail investors, has historically been limited by a lack of accessible and appealing investment options. Unlike other sectors, such as transportation or food delivery, the investment ecosystem has not yet seen the disruptive wave that platforms like Uber or Robinhood brought to their industries. This has left many potential retail investors disengaged, especially in a region where spending habits have traditionally outweighed saving and investing.
However, two significant shifts are now changing this. First, the rise of investment apps tailored to different segments is bridging the gap, making investment accessible and relevant to a broader population. Second, global economic dynamics have prompted many in MENA to rethink how they protect and grow their wealth, with many now opting for investments over consumption.
Regulators are also facilitating this shift by modernising policies. In Egypt, for example, over 20 laws have been updated to support retail investment, including enabling digital account openings and cash-based account funding. The UAE, meanwhile, is encouraging global brokers to access its exchanges without local registration, enhancing cross-border accessibility. While high initial capital requirements still pose barriers for new companies, ongoing reforms are creating a more inclusive investment landscape that is gradually driving higher participation across age groups, gender, and non-urban areas.
Perspectives on Exchange Technology
Panellists offered differing views on the current state of exchange technology in the MENA region and the opportunities it presents.
One speaker highlighted that MENA’s distinct cultural and regulatory environment significantly influences how exchanges integrate with other market participants, including clearing houses and brokers. A key obstacle lies in outdated or non-existent middle-office software, which limits the region’s ability to accommodate high-frequency trading volumes common in more developed markets. For MENA exchanges to evolve, three potential paths were suggested: adjusting regulations to align with global standards, enabling major technology providers to operate in the region without heavy customisation; supporting existing players to scale up their capacities; or welcoming new entrants that could tailor services specifically for the region’s needs. Notably, exchanges in Egypt and Abu Dhabi are overhauling their trading systems to meet global standards, with the Abu Dhabi Exchange (ADX) also a regional initiative to link exchanges across MENA, enhancing cross-border connectivity.
In contrast, another panellist focused on the region’s growing local investment culture, especially among high-net-worth individuals and wealthy families in the GCC, who traditionally invested abroad. A lack of sophisticated products and standards, like market-making and short-selling, has historically held MENA exchanges back, but local liquidity is on the rise as exchanges begin to offer more diverse assets. While the first panellist saw outdated systems as a hurdle, the second emphasised ongoing improvements in exchange technology, with exchanges like Saudi Arabia’s Tadawul benefiting from younger, tech-savvy management. The panellist pointed to high-profile IPOs and government-backed asset programs as examples of how exchanges are becoming increasingly appealing. However, post-trade and clearing processes remain underdeveloped, especially for equity markets, which continue to present challenges for investors. Despite these issues, both panellists agreed that MENA’s evolving infrastructure is attracting increased attention from international funds and asset managers.
Deterministic Latency and Time Synchronisation
Exchanges globally are increasingly adopting advanced technologies to enhance connectivity, speed, and transparency, which are now being explored in the MENA region to boost growth. Historically, internet-based connections and lower-bandwidth setups sufficed for retail and low-volume trading, but exchanges today are introducing co-location facilities, allowing sophisticated trading firms to access faster, high-quality infrastructure directly. This shift is beginning in MENA, with exchanges like the Saudi Stock Market leading the way, attracting algorithmic traders through modernised technology setups.
A key aspect for these advanced systems is deterministic latency, critical for electronic market makers. Technologies like AMD’s Solarflare cards are being used to achieve this, ensuring fair and consistent order processing. To maintain competitive costs and simplify integration, MENA exchanges can implement standardised hardware and networking technologies widely used in developed markets, reducing the cost barriers for newcomers and aligning with global practices.
Another foundational technology is time synchronisation, essential for ensuring fair trading and tracking behaviours like potential market manipulation. Accurate time-stamping allows exchanges to track the precise order of transactions, detect unusual activities, and improve transparency. Technologies such as Precision Time Protocol (PTP) and Pulse Per Second (PPS) enable exchanges to achieve near-nanosecond accuracy, with a robust network of synchronised clocks needed for comprehensive tracking. Exchanges can even monetise time services by providing these high-precision timestamps to data centre customers. Ultimately, as MENA exchanges integrate these advanced technologies, they’ll create a more secure and efficient trading environment, accommodating both local and international participants.
Colocation and Connectivity
Co-location opportunities in the MENA region are relatively new, akin to early developments in Europe and the U.S. in the 2000s. As exchanges grow and trading volumes increase, more exchanges are transitioning to data-centric business models, generating revenue from data distribution alongside trading access. These co-located environments rely on specialised low-latency hardware to meet the precise speed and fairness requirements of algorithmic trading.
For international firms looking to trade in MENA, connectivity remains a challenge. Unlike Europe and the U.S., where connectivity between major financial hubs is cost-effective and widely available, the MENA region has high connectivity costs and landing taxes, especially in places like the UAE. Furthermore, firms must source data from multiple exchanges to support trading activities, such as oil price data from the CME, which adds to the cost and complexity. Additionally, regulatory requirements in MENA often require a fully disclosed model, meaning exchanges need to perform due diligence and register each end-user—unlike the “omnibus” approach used in the West, where the broker handles the client details.
A consolidated infrastructure across MENA exchanges, similar to the CME’s “point of presence” model in London, could significantly reduce costs for international traders by allowing easier access to MENA exchanges from major global financial centres. This type of coordinated effort would help streamline access and make co-location more feasible for firms worldwide.
The MENA Region’s Future Role in the Global Market
In conclusion, panellists agreed that the MENA region’s exchange technology landscape is experiencing significant growth, positioning it as a critical bridge between major global economies. With expanding infrastructure, MENA markets are attracting international investment by providing increasingly sophisticated solutions that link European, U.S., and Asian financial centres.
Panellists envision substantial inward changes in MENA markets over the coming years. First, there will be a broader variety of investment options as the region diversifies beyond traditional industries like agriculture, tourism, and oil. Technology and innovation companies are likely to emerge as new listing categories, better reflecting today’s economy. Second, a shift towards greater societal representation is expected, as markets become more accessible to everyday investors, changing the dynamics of market participation. Finally, the region’s financial hubs are forming—Saudi Arabia and Egypt as key anchors, with Qatar potentially consolidating smaller markets, creating a unified, powerful force.
It was also noted that MENA serves as a testing ground for investment models in emerging economies, combining advanced infrastructure with growth potential. Despite challenges, tech investments approved by regional exchanges are spurring development, supporting local startups, and encouraging wider trading activity. This resilience in market growth and liquidity is creating a more favourable environment for both local and foreign investors, even amid geopolitical uncertainties, laying the groundwork for MENA to act as a vital conduit between Europe, Asia, and wider Africa.
This webinar was sponsored by AMD.
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