Chatter about a possible merger between rival stock exchanges in Dubai and Abu Dhabi refuses to subside. After almost a month since the tie-up buzz resurfaced, the local market watchdog has finally reacted, the regulator's comments only serving to fan the speculation further.

The noise started a couple of weeks before MSCI Inc.'s annual market classification review announcement in mid-June, apparently after some innocuous comments by UAE government officials on an "imminent" cross-emirate company merger.