Taib Securities brokerage pulls out of UAE amid trade drop

03/01/2012 08:18 AST

Taib Securities, the brokerage arm of Bahrain's Taib Bank, says it will close its UAE operations immediately to cut losses amid depressed market conditions, and shift focus to its home market.

The closure comes as fears continue to mount that many of the country's remaining brokerages will close before the end of the first quarter as trading volumes plummet.

"We are closing the UAE office because volumes are very low," said Khaldoon bin Latif, the general manager at Taib Securities in Bahrain. "From a return on investment perspective, it didn't make any sense," he added.

Many brokerages closed UAE operations last year after the Arab Spring and European debt crisis reduced trading volumes. The value of equities traded by UAE brokerages declined 45 per cent to Dh57 billion (US$15.51bn) last year, compared with the same period a year earlier.

The Abu Dhabi Securities Exchange traded $15 million worth of shares on the first trading day of the year, compared with the $26 million average last year. The Dubai Financial Market was down to $8m, compared with the $34m average last year. Fifty-seven brokerages are still operating in the Emirates, down from 103 at the beginning of last year.

Many foreign investment banks have restructured their operations in the UAE to cope with falling volumes. Germany's Deutsche Bank recently moved its head of equity capital markets back to London from Dubai. Nomura, based in Tokyo, closed its Dubai equity research unit, and the UK's HSBC has shut its retail brokerage unit in the Emirates.

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The National