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INTERVIEW: Dubai plays the numbers game
Even as the global economic climate heats up, Dubai is attracting financial traders from the world over. Kipp speaks to Jamie Lear, CEO, Dubai's Professional Trading Group DMCC, for some insights into the high octane world of financial trading.
July 25, 2012 10:24 by Priyanka Pradhan
How is the financial trading environment in Dubai different from the big centers such as London and NY?
Dubai is still much smaller than London and NY in terms of transaction volume, but it has the potential to be the top financial centre in the MENA region and it is surely heading there, recent recession notwithstanding. All the big global financial institutions are represented in Dubai’s financial free-zones such as DMCC and DIFC, plus Dubai has a sizeable (and fast growing) financial services industry of its own, catering to a vast and diverse population from the GCC. Dubai is the center for many regional investment houses and branches of global firms dealing in the entire MENA asset spectrum. Given its ‘safe haven’ status as social unrest elsewhere in the region continues, we expect this Dubai-centric growth to accelerate.
Since DPTG is the first player in the trading arcade industry in Dubai, what changes have you seen in the industry since DPTG’s inception here?
Since we arrived in Dubai in 2007, interest in financial trading has increased tenfold. Initially, the majority of our traders were sourced from the UK and, to a slightly lesser extent, other European and North American financial hubs. However, given greater interest in potential careers in financial trading from the MENA region, coupled with our regular training and mentoring programs, interest from the region plus India has grown increasingly important. Our aim at DPTG is to ensure that this interest is well served and controlled under the watchful eye of experienced professionals. More recently, there have also been a number of new entrants to the sector offering training either on-line or through relatively brief classroom programs. However, these are aimed more at those who merely seek sufficient knowledge to trade part-time or as a hobby.
Trading aspirants do not have adequate awareness about the workings of the financial trading industry. How do you plan to spread awareness about the same, in Dubai?
DPTG has a wide range of trader training programs that cater to the growing market of financial trading aspirants. Our view is that, while some value is added by relatively short classroom-based introductions to the basics, the only efficient way for novices to really understand the nature of the opportunity – its risks, rewards and the related qualities required of those who will trade successfully – are through comprehensive programs including economic theory, market practice, simulated trading and thorough mentoring while trading ‘live’.
There is a huge untapped market comprising of residents of GCC and the Indian subcontinent, who have a basic idea about this industry. Our challenge is to reach them and to ensure they receive a balanced and realistic introduction to the risks and opportunities relating to financial trading. We are currently working closely with both UAE-based and global exchanges on a number of joint programs. As an example, the recent University Trading Challenge, promoted and financed jointly by DPTG and Eurex, drew seven teams of undergraduates from UAE universities who participated in a two-week contest. Their enthusiasm is contagious and this, plus other subsidised and tailored training and mentoring programs are efficient ways to ‘spread the message’.
Statistics say that more than 90% of financial traders tend to fail to make a sustainable career out of it. Could you comment on the same?
On the face of it, this is probably true. However, possibly encouraged by over-enthusiastic advertising in the media, maybe 90% of those that aspire to trade are looking to make a fast buck; most of them come with totally wrong perceptions and ideas of this field – and little intention of committing to the dedication, application and sheer hard work that are the foundations required of a successful trader.
Trading, like any other highly skilled field, requires time commitment and practice and a mind-set – there is no ‘quick fix’. Quite apart from the personal attributes of mental acuity and self-discipline, to be successful trader, a novice trader must build solid foundations that only come from detailed knowledge of economic fundamentals, study of market behaviour and heavily mentored practical experience – gained over time.
What is the market size and scope of trading arcades in UAE/ Dubai?
Obviously this is a new industry here and smaller than in London or the United States but it’s an industry with strong growth. A number of small arcades have sprouted up in the last two years or so, many of which choose to remain small in-house affairs. Here at DPTG we welcome anyone from all over the world to come and experience trading or training in Dubai – particularly those from our region.
As the comparatively new UAE-based derivative exchanges of DGCX and DME ramp up trading volumes, we are seeing a big increase in interest from both experienced and novice traders in trading (and market making) on these exchanges. Given the particular interest of regional participants in trading oil, gold and the Indian Rupee, the Dubai-based derivative contracts are of particular interest. There is a groundswell of interest in this field and we are determined to be at the forefront of that growth.
Retailers have an option of opening trading accounts online- would you consider this as competition?
No. The home trading amateur market is certainly growing and we welcome any increased interest in our business and we can see no conflict of interests at all. We aim to offer the highest possible specifications and office facilitation for the high end professional trader; it’s just a separate part of the same business. Anyone who has succeeded as a home part-time trader is welcome to take the next step in their career and move to the arcade as a full time professional with us.
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