By Daniel Stanton
Head of brokerage firm says move would benefit investors and markets.
The head of one of a leading securities brokerage firm has predicted a strong year for the UAE stock markets, but urged the regulator to license brokers to issue financial advice in order to educate investors.
Hassan Ali Choucri, general manager of Al-Futtaim HC Securities Company, a joint venture between the Al-Futtaim Group and Egypt's HC Securities & Investment, predicted that the markets would be stable for much of the year before gaining 30-40% in value.
He added: "2008 will be an even better year because everyone's forecasting prices in real estate to come down a bit and the main beneficiary of a slide in real estate will be the stock market. It was the other way round in 2006. I think that some of the money that went to speculate on real estate will come back to speculate on equity."
He also urged the Emirates Securities and Commodities Authority (ESCA), the UAE stock market regulator, to allow brokerage firms to provide financial advice to their clients, something which is currently not permitted. At present, Al-Futtaim HC Securities Company can only offer financial advice through HC Securities & Investment in Cairo.
ESCA is believed to be currently considering whether to broaden the range of services that brokers are allowed to provide, something that Choucri said would help educate investors.
He added: "It may have some impact on the volume traded but it's better for the market, so you don't see a massive crash for no reason.
"Look at London and what brokers offer there. This is not allowed here in terms of advice, research and so on. The regulator here needs to copy models from successful experiences and implement it here to keep up with the pace of growth in the country."