Prime Emirates becomes latest brokerage in the UAE to shut down.
Egyptian brokerage in Abu Dhabi shuts down
An Egyptian brokerage firm is suspending trading in Abu Dhabi, although the company says the decision is based on poor market conditions in the UAE and not civil unrest in Egypt.
Prime Emirates suspended operations in Abu Dhabi this week, becoming at least the 20th brokerage to shut down in the country in the past eight months. The company's Cairo headquarters have also been temporarily closed due to the protests there, but senior management said the two shutdowns were unrelated. "We have suspended trading in Abu Dhabi upon instructions from the head office and owners [in Egypt] but we don't know when we will re-start," said Hazem Ahmed, an assistant manager at the brokerage. "Our company in Egypt is OK. After all the protests are over, everything will be OK."
Of the 50 employees based at the Abu Dhabi office, only a handful of managers were present to settle client accounts yesterday. Some Egyptian employees are considering moving back to Egypt in spite of the protests, said a source close to the company who did not want to be named.
The source said the decision to suspend trading was taken in the past week but low volumes in local markets had been a problem for months. Many brokerages in the UAE have struggled to maintain profits because of the lack of liquidity on the country's two main exchanges, the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market. At least 20 brokerages have closed in the country in the past eight months.
The volume of traded shares on both exchanges has fallen below the 100-million mark from pre-crisis highs of about 300 million. Prime Emirates is majority-owned by local investors, including the Emirates International Investment Authority, and 20 per cent owned by Prime Holding, which is headquartered in Egypt. Prime Holding also operates as an investment bank.
It posted a net loss of 8.5 million Egyptian pounds (Dh5.3m) for the nine months to September last year, compared with a net profit of 3.1m Egyptian pounds in the same period in 2009.