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Wednesday, 21 December 2016

Consolidation among UAE brokerages is the need of the hour | The National

Consolidation among UAE brokerages is the need of the hour | The National:
"Some sectors are more stressed than others and the brokerage sector in the UAE is one of them. Just as the UAE is overbanked, it is also overbrokered.

Built on soaring volumes and value traded before the global financial crisis, the industry was aided by heavy retail participation mostly trading for speculative purpose than investing reasons. Lack of investor sophistication meant more volume and value traded and, hence, juicy commissions. No wonder more than 100 players were attracted to set up in what was thought to be a super growth industry. The narrative has changed completely now thanks to the global financial crisis and low oil prices.


Despite its recent rally, the price of a barrel of Brent crude, at US$55.25 yesterday afternoon, is still more than half its peaks of mid-2014. And the Dubai Financial Market General Index is about 43 per cent below its peak level in 2008."

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