ADS Securities, an Abu Dhabi-based foreign exchange and commodities brokerage, is applying for a stock-trading license as markets in the United Arab Emirates rebound from a plunge that forced some brokerages to close.
“We are in the process of getting a license and it may take about six months,” Managing director Philippe Ghanem said in an interview in Abu Dhabi yesterday. “We need to serve the demand. We need to become a fully-fledged brokerage.”
Declining stocks markets in the U.A.E. in 2011 hurt the Persian Gulf nation’s brokerages, with the number of companies slumping to 48 from 98 at the end of 2008. Trading volumes in Dubai sank to a six-year low last year and the benchmark stock gauge fell 17 percent as regional uprisings and Europe’s debt crisis spurred concern economic growth would slow. Abu Dhabi’s benchmark fell 12 percent in the period.
Shares have since recovered, with Abu Dhabi’s ADX General Index gaining 6.9 percent this year and Dubai’s advancing 23 percent. The volume of shares traded in the U.A.E. capital has also improved this year with about 227 million shares changing hands on Feb. 20, compared with a 12-month daily average of 70 million shares, according to data compiled by Bloomberg.
ADS Securities began its operations a year and a half ago with a capital of $400 million, Ghanem said. The brokerage seeks to take advantage of the U.A.E. timezone to provide foreign exchange and commodities trading between the closing of markets in Europe and the opening of markets in Asia, he said.
“If you were a client before, you were trading with UBS, with Citi or with Saxobank,” Ghanem said. “Now the volume is passing through here. The volume here is staying in Abu Dhabi.”
The U.A.E., the second-biggest Arab economy, has three bourses -- Nasdaq Dubai, Dubai Financial Market and Abu Dhabi Securities Exchange.