Abu Dhabi, the major Middle East financial center, says it's preparing to create a platform to launch exchange-traded funds.

In detailing plans on Thursday, Rashed Al Baloushi, the deputy chief executive of the Abu Dhabi Exchange (ADX), credits increasing ETF demand by retail and institutional investors in the Middle East for the exchange's decision to build an ETF-specific platform.

Across the Middle East, ETFs and other traded securities are proving more popular and catching the attention of exchanges. The Dubai International Financial Exchange (DIFX), as well as exchanges in Oman and Saudi Arabia, has also shown interest in adding ETFs.

The latest ETF plans are also part of ambitious efforts by many Middle East markets to diversify away from oil wealth and become true, global financial centers.

Earlier this year, the Abu Dhabi Securities Market signed a joint venture deal with NYSE Euronext. The United Arab Emirates' Borse Dubai and the Qatar Financial Centre Authority bought large stakes in the London Stock Exchange last year, and DIFX inked a strategic deal with NASDAQ to develop its regional platform.

The Egyptian Stock Exchange has said it plans to list ETFs, stock and index futures, and options, in the next year, and a major Egyptian bank already has plans to list an ETF on the primary Egyptian stock index (see story here.) 

Baloushi made his comments while speaking at a brokerage conference in Abu Dhabi. ADX has been working with ETF consultants to study the success of ETFs in other global markets.

Across the globe, net sales of ETFs have been rising as net assets in traditional mutual funds have decreased. In Europe, for example, net sales into ETFs were $43 billion through the first seven months of the year, while traditional funds had outflows of $148.6 billion, according to Barclays Global Investors data.

The closest thing to an ETF market in the Middle East, at this point, is Turkey, where there are five ETFs from two asset managers, according to BGI.

—This report was submitted by Eric Rosenbaum. He can be reached at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .