Weak trading and global crisis hit DFM profits

Persistently weak trading volumes, compounded by the global financial crisis, sent profits at Dubai Financial Market (DFM) Company down by more than 75 per cent last year.
Similarly weak trading patterns have continued this year, despite improvements in the world's economy, as political unrest has worried investors across the Mena region.
Analysts said the lack of substantial trading volumes on the Dubai market, which are equally weak on Abu Dhabi's stock exchange, could be helped by a merger of the emirates' bourses.
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"A merger with the Abu Dhabi Securities Exchange makes economical sense," said Ameed Kanaan, the general manager at Al Jazeera Financial Services in Dubai.
"It would bring depth to the markets. Foreign investors who will look at one market will see it differently than three separate exchanges."
Speculation about such a merger has gone on for months, but as yet no deal has come to light.
DFM, the Arab world's only listed bourse, posted a full-year profit of Dh78.9 million (US$21.4m), the company said, down 77 per cent from Dh347m in 2009.
DFM said last year revenues stood at Dh260.5m, down from Dh502.9m in 2009.
Revenues have slumped along with trading turnover, which fell to a six-year low of Dh69.7 billion last year, down from Dh173.5bn in 2009 and less than a quarter of the 2008 total.
"The 60 per cent decline in DFM trading value last year was considerably reflected in our revenues and net profits," said Essa Kazim, the chairman and chief executive of DFM.
Profits in the final quarter of last year were particularly weak. DFM had a quarterly profit of Dh5.9m, according to Reuters, compared with Dh88.6m in the same period in 2009.
Mr Kanaan added the results beat the expectations of most analysts but they were still not good news.
"The full-year results are better than expectations, as consensus expected the bourse to report Dh55m for the full year, but investors will still take the news negatively," he said.
halsayegh@thenational.ae