The city's glitzy property market has lured Donald Trump, the Four Seasons and Le Meridien luxury resort brands and even David and Victoria Beckham, who have reportedly bought a villa on the Palm Jumeirah, one of Dubai's man-made island fantasies.

In contrast, the Dubai International Financial Exchange (DIFX), launched on September 26, has so far only attracted one dual-listed firm and five equity index-tracking securities from Deutsche Bank, covering New York's S&P500, Frankfurt's DAX 30, Tokyo's Nikkei 225, Europe's EuroStoxx 50 and the Dow Jones Stoxx 50.

Liquidity at the DIFX has been as dry as the desert air outside but authorities are confident that the recent global depositary share (GDR) dual-listing by regional telecommunications giant Investcom will usher in more initial public offerings.

'[We are] satisfied with the listing and with the trading volumes since we listed in early October,' said Investcom chief executive Azmi Mikati. 'We are committed to listing ordinary shares on the DIFX at some point in the future.'

The mobile operator has more than three million GSM mobile-network subscribers, mostly under the Areeba brand, in Benin, Cyprus, Ghana, Guinea Bissau, Liberia, Syria, Yemen, Guinea, Sudan and just recently in Afghanistan.

It became the first listed company on the DIFX after a US$741 million initial public offering in London, involving 60 million GDRs - the biggest London offering by a Middle Eastern firm - and valuing it at US$3 billion.

'The DIFX is a natural home for the firm to list its shares,' said Mr Mikati. 'It is an ambitious international exchange in a rapidly growing international financial hub with the Middle East at its heart - in many ways like Investcom.

'Our business is in several Middle Eastern markets, our management team is largely Middle Eastern and our majority owners are Middle Eastern, so the DIFX is the logical place for our shares to be listed,' he added.

Unsurprisingly, the DIFX has hailed Investcom's GDR issue as 'highly significant'. 'It demonstrated that a well regarded and profitable company saw the DIFX as its preferred bourse in the region,' said an exchange spokesman. 'With the first IPO successfully launched, DIFX can now take a credible and successful case study to the market. Deals until now have been modest. We expect this to accelerate gradually as the market becomes familiar with the exchange.'

Indeed, global familiarity will be a key ingredient for the DIFX - a new kid on the very crowded financial block of the United Arab Emirates, which already has two 'national' stock exchanges, one in Dubai and the other in Abu Dhabi.

'It may take some time for investors to get used to the new market before they make their move,' said P. Krishnamurthy, a Dubai-based stock market analyst at the National Bank of Fujairah. 'Without any market-moving news, we cannot expect the volume to show any sizeable increase.'

He said one possible reason for the slow take-up at the DIFX was because it was mostly off-limits to local retail investors, unlike the five-year-old Dubai Financial Market (DFM), the local exchange.

'While it is easier for the general investor to trade on the DFM, the DIFX is completely different, with intermediaries who will focus only on institutional investors,' he said.

'However, once the DIFX gets wider acceptance among the international investor community, things will change. As more scrip is listed, the market will definitely show improved performance and register higher volumes.'

Nasser Alshaali, DIFX chief operating officer, expected it to have had 10 to 15 listings by the end of next year, raising US$2 billion.

Without giving a fixed timetable, Mr Nasser said that Investcom's debut would be followed by the DIFX's first bond listing and then a second listing. Seven more bonds and five sukuks, or Islamic bonds, would follow.

During the DIFX debut, its new chairman, Lynton Jones, said that the exchange would be the first Middle East bourse to list financial derivatives and index products, including financial instruments that comply with Sharia, the Islamic law that bans payment and receipt of interest and forbids investment in tobacco, alcohol and gaming.

Some may dismiss these ambitious claims as laughable, like the man-made islands that Dubai has conjured on its shores and sand dunes. But Dubai is an autocracy where rules can be conceptualised, written, approved and implemented in 24 hours - on a slow day.

In fact, the DIFX itself opened a mere three days after being a licensed as an authorised market institution by the Dubai Financial Services Authority, the regulator for the Dubai International Financial Centre, the tax-free financial district that also houses the new Dubai Gold and Commodities Exchange.

The DIFX, under rules similar to those at the London Stock Exchange, began trading with five brokerages - Citigroup Global Markets, CSFB (Europe), Deutsche Bank, HSBC and UBS. They were expected to be joined by regional players such as Daman Securities, Shuaa Capital, MashreqBank, Global Investment House and EFG Hermes.

Under DIFX listing rules, candidates must have a minimum market capitalisation of US$50 million and a free float of 25 per cent. As on any international exchange, companies seeking listing must submit audited accounts using international financial standards.

According to Mr Nasser, the main initial targets of the DIFX are deep-pocketed, family-owned regional firms such as Investcom.

One quarry that the DIFX is reportedly wooing is Emaar Properties, the government-owned, US$40 billion firm constructing Burj Dubai, billed as the world's tallest building and another monument to Dubai's vast ambition.

Emaar chairman Mohammad Ali Al Abbar said the company was preparing to list on the London and New York stock exchanges, possibly next year. If the DIFX can secure a tertiary listing of what will assuredly be a gargantuan Emaar offering, its seemingly ambitious US$2 billion listing quota for 2006 will be a mere mote in a sea of sand.