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Sunday, 11 September 2011

Brokerage firms in the red: Debt soars to Dh1.5bn in H1 2011

The debt of brokerage firms based in Dubai and Abu Dhabi Financial markets rose to about Dh1.5 billion by end of first half this year, according to the latest financial statements as reported in Arabic daily 'Al Bayan'.

About 35 companies were forced to shut down their activities, some partly, since 2009. This reflects the challenges faced by majority of such firms, it said and added that integration is the only solution for smaller firms.

Brokers said most banks reduced the size of the credit facilities granted to them or apologised for providing new facilities. They noted even banks are afraid of liquidity issues, suffered in the past, when it comes to offering services to customers. This is only adding to the miseries of brokerage firms, said some brokers.