Q1 2009 80 stock brokers in red 15 green (Re-posted from Blogoronomy.wordpress.com)

Al Bayan article via Mubasher (Translation):

80 out of 95 local stock brokerage companies registered losses in the first quarter of this year after disclosing financial performance to the Emirates Securities and Commodities Authority (ESCA). Last year 28 stock brokerage companies registered losses for the same period.

Analysis by Al Bayan Economic (Business section) observed that the increase in losses follows dramatic declines registered by the stock markets in the first quarter. The losses represent a precedent for the brokerage companies since the markets’ inception 8 years ago, signalling the need to study market conditions to help preserve the rights of investors (clients), especially those of smaller companies suffering from lack of liquidity. These smaller companies exceed 60 in number and are barely covering their operational expenses.

The study covering the financial reports of 95 companies shows that losers include large brokerage houses affiliated with banks, an indication of how dire the situation is for stock brokerage firms.

The study notes the urgent need for industry consolidation to increase the finanical ability and strength of brokerage companies to ensure survival in the future.END