UAE’s Al Mal Capital cuts staff as trading slumps
UAE investment bank Al Mal Capital has reduced workforce by about 85 percent since 2009, as low trading volumes in the region impact brokerage operations, four sources familiar with the firm said.
November 2, 2011 12:18 by Reuters
Staff were made redundant in small groups, bringing headcount down to 20 from about 130 in early 2009, according to one source.
The firm has told employees the measures were a result of low trading volumes hitting the brokerage business.
Al Mal was not immediately available for comment.
“There was a …round in late-August or early September and then a second round more recently,” said an industry source, adding that plunging trading volumes on UAE bourses was mainly behind the decision to close down Al Mal’s brokerage.
“Scale is very important for brokerages, but asset management can function a lot easier with just a few people, so it seems like the company is going to focus on that,” he added.
All divisions of Al Mal have been effected by the market downturn, with the research and U.S. desk being shut down, sources confirmed.
Daily trading volumes have dwindled on UAE’s markets in the past two years after a property bubble burst and a credit crunch hit the stock markets in Dubai and Abu Dhabi.
This year, political unrest in the region has kept foreign investors on the sideline, avoiding riskier frontier markets of the Arab Gulf in favor of safer bets in emerging markets.
With less that two month to the year-end, trading value on Dubai’s bourse is 29.4 billion dirhams ($8 billion), less than half of total turnover in 2010 and less than 10 percent of pre-crisis amount of 379 billion dirhams in 2007.
Monthly trading volumes in Dubai fell from 11.2 billion in Oct. 2009 to 1.2 billion during last month. ($1 = 3.673 UAE dirhams) (Reporting by Nadia Saleem, Matt Smith and Nadine Wehbe; Editing by Firouz Sedarat)