Investment bank is winding down its brokerage business in the UAE, say sources
Mal Capital, a United Arab Emirates investment bank, has cut staff by about 25
percent and is winding down its brokerage business in the Gulf nation, two
people familiar with the matter said.
employees at Al Mal Capital have been laid off, bringing staff to around 20,
the people said, declining to be identified because the matter hasn’t been made
public. The company employed over 100 people in 2008, one of the people said.
Mal Securities, an Al Mal Capital unit, was ranked 57th by value traded on the
Dubai Financial Market in September, according to the bourse’s website.
banks in the UAE are cutting costs after the credit crisis weakened lending,
crimped investment banking and spurred loan defaults. Deutsche Bank and Credit
Agricole are among international banks withdrawing employees from Dubai. The
number of “active and functioning” brokerages in the UAE has dropped 38 percent
since the end of 2008 to 61, according to the Securities & Commodities
unrest in the Middle East and debt restructuring pushed Dubai trading volumes
to a six-year low. HSBC Holdings, Europe’s biggest bank, is ending retail
brokerage to focus on institutional clients, the bank said in October. Al
Futtaim HC Securities, a Dubai-based brokerage, is discussing a possible
suspension of its trading license with owners, a person involved in the talks
volume of shares traded in Dubai has plummeted to a daily average of 108
million this year from 160 million in the year-earlier period and 470 million
in 2009. Dubai’s benchmark index of 31 stocks slumped 83 percent from a record
in 2005 to 1,408.06 at yesterday’s close.
earned by banks in the Middle East fell 42 percent to $320 million in the first
nine months of the year from $551.1m during the same period in 2010, according
to New York-based research firm Freeman & Co.
Mal officials were not immediately available for comment when contacted by
Bloomberg News yesterday.