18/02/2013 12:14 AST
Al Mal Capital, a Dubai-based investment bank whose shareholders include members of Abu Dhabi's ruling family, will boost staff by 20 per cent in 2013 as the economy recovers, Deputy Chairman Naser Nabulsi said.
"The first phase was to swim and survive, and we survived," Nabulsi said in an interview in Dubai on February 13. "2013 is going to be a good year for companies who prepared for the next cycle."
Investment banks in the United Arab Emirates are rebuilding their businesses more than four years after the global financial crisis prompted a real estate crash in the country and an exodus of foreign investment from the nation's stock exchanges. To cope with the slowdown, Al Mal cut its staff to below 20 from more than 100 and shut its securities brokerage in the last three years, helping cut yearly costs by 80 per cent, Nabulsi said.
Volume on local bourses has picked up after Dubai's economy grew at the fastest pace since 2007 last year and the city's equities index jumped 16 per cent in January, the best start to a year since the exchange started operations in 2000, according to data compiled by Bloomberg. Average volume last month was double the 12-month daily average, the data show.
'Fierce cash'
"We've seen fierce cash coming into Dubai equities from Saudi, Qatar and foreign funds and into real estate," said Nabulsi, who headed the Dubai International Financial Centre, a tax-free hub for international banks and asset managers, when it opened in 2004. "There's a fundamental shift in Dubai's image and this has a lot to do with the market momentum and investors' confidence."
Property prices in the emirate, which is home to the world's tallest skyscraper, rose in some neighbourhoods last year after the crash sent them tumbling more than 60 per cent from peaks in mid-2008. Dubai's economy probably expanded five per cent in 2012 due to a rebound in tourism, hotel and restaurant industries, according to government estimates.
The recovery "is real and will continue going forward," Nabulsi said. "When things are looking good for the economy, we're going to do just as well." January's average volume was still about half the shares traded in the month in 2008, according to data compiled by Bloomberg, leading some investment banks to diversify their businesses.
Al Mal has Dh220 million in capital ($60 million) after last month giving 40 per cent of excess liquidity back to shareholders, according to Nabulsi. The company is working on four to five mandates for mergers and acquisitions in the six- nation GCC and expects a drought in initial public offerings may be coming to an end, he said.
Asset management
"Our attention will be on growing the asset management going forward," said Nabulsi, adding that Al Mal wants to boost by 25 per cent annually the assets it manages over the next five years. "We may start to see a lot of family companies going public. A lot of them are waiting for the end of the first quarter to make sure this is a genuine recovery."
The investment bank will also add two funds this year and plans to start wealth management services, in conjunction with partners in the UK, Turkey and India, to promote third party funds. The Al Mal UAE Equity Fund returned 30 per cent in 2012, outpacing of 20 per cent for the DFM General Index, data compiled by Bloomberg show.
Bloomberg
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