Shuaa Capital started another round of job cuts as the investment bank controlled by Dubai’s ruler moves away from retail brokerage business after markets in its home base declined and losses mounted.
“The redundancy program will take a number of weeks to complete,” the Dubai-based company said in an emailed statement. “In the first phase 29 people will be affected.”
Shuaa, which hired former Credit Suisse Group board member Michael Philipp as chief executive officer in October, has cut staff over the past year as brokerages in the UAE shut down and foreign banks reduced operations.
The company had a third-quarter loss of AED156.2m ($42.5m) after booking provisions.
Shuaa plans to expand its asset management and advisory business in Abu Dhabi, Saudi Arabia and Kuwait and will focus on high net-worth family businesses and small- to medium-sized companies as well as institutional clients, Philipp said in October.
The company, which plans to retain brokerage licenses in the UAE and Saudi Arabia, hired Houssem Ben Haj Amour as finance director from Societe Generale in Tunisia, according to today’s statement.
Markets in the Middle East have been hurt by uprisings that ousted leaders in Tunisia and Egypt and amid fears Europe won’t be able to contain its debt crisis. Fees earned by banks in the region fell 42 percent to $320m in the first nine months of the year from $551m during the same period in 2010, according to New York-based research firm Freeman & Co.
“Markets have been challenging for the entire industry in 2011, and we expect conditions to be much of the same for the next few quarters,” Shuaa said in the statement.
The value of shares traded on Dubai’s stock market slumped to AED19.5m ($5.3m) on Nov 16, the lowest since August 2004, data compiled by Bloomberg show.
Shuaa shares fell 3.3 percent to 58 fils today, the lowest since August 2002. The stock has dropped 54 percent this year, valuing the company at AED618m.
That compares with an AED3.95bn market value at the end of 2005.