Emaar Financial Services closing down

The UAE financial brokerage's closure ends a year in which the sector shrank by more than 25 per cent.

Another UAE financial brokerage is shutting down, capping a year in which the sector contracted by more than a quarter because of low volumes on the stock markets.

Emaar Financial Services, based in Dubai, said in a statement on its website that it had received the approval of the country's stock exchange regulator to suspend its brokerage activities.

"Emaar Financial Services has received initial approval from Securities and Commodities Authority (SCA) for the temporary suspension of its brokerage licence," the statement said.

On Thursday the company will terminate its trading activities. Its online trading platform will be disabled.

In accordance with SCA requirements, Emaar Financial must immediately refund its clients' credit balances. It also must transfer out of its custody any securities held at that time.

Emaar Financial's offices in the Dubai Financial Market (DFM) building have been closed for several months.

Others in the industry lamented the firm's departure, saying that having local firms alongside global investment companies was important.

"It is unfortunate where the local brokerage industry is going," said Mohammed Ali Yassin, the chief investment officer of CAPM Investment in Abu Dhabi.

Brokerage revenues in the Emirates dropped sharply at the start of the year as trading volumes slumped to the lowest in four years on the DFM and the Abu Dhabi Securities Exchange.

More than a quarter of the brokerages operating at the start of the year closed because the fees they would earn from conducting transactions for clients dried up as trading volumes remained low. The SCA said in November that 76 financial securities firms were operating in the country that month, down from 103 at the start of last year.

Emaar Financial Services is a unit of Emaar Properties and the Islamic mortgage company Amlak Finance.