Dubai - Arabstoday
Al Futtaim HC Securities, a brokerage based in Dubai, decided to shut operations in the United Arab Emirates after stock trading and volumes slumped. “Shareholders of Al Futtaim HC Securities have agreed to discontinue the brokerage operations in the UAE,” general manager Hasan Choucri said in a telephone interview on Wednesday. Al Futtaim Development Services Co owns a 65 percent stake and Cairo-based investment bank HC Securities & Investment holds the remainder. Al Futtaim was ranked 14th by value traded in December, according to the Dubai Financial Market’s website. Some brokerages in the UAE are suspending operations or cutting costs after political unrest in the Middle East and debt restructurings pushed average trading volumes in Dubai to a six-year low. HSBC Holdings will stop offering brokerage services to retail investors in the UAE and focus on institutional clients, the bank said in October. “The main reason is the liquidity of the market, and you still have too many brokers that are not able to generate enough commissions in order to keep operating,” said Sebastien Henin, who helps oversee $100m at The National Investor in Abu Dhabi. “Unfortunately big players may have to reduce costs and the smaller ones may have to close altogether.” The number of “active and functioning” brokerages in the UAE has dropped 42 percent since the end of 2008 to 57, according to the Securities & Commodities Authority website. CAPM Investment, a financial services company based in Abu Dhabi, may suspend operations if global market conditions don’t improve in the next three months, two bankers with knowledge of the situation said earlier on Wednesday. Dubai’s DFM General Index slumped 17 percent in 2011, while Abu Dhabi’s ADX General Index decreased 12 percent in the period.