Monday, Oct 17, 2011
--HSBC says UAE retail brokerage business to close from December
--To focus on institutional clients amid expected activity pick up
--Says no jobs will be cut as part of move
(Adds background on turnover volumes in paragraph 4.)
DUBAI (Zawya Dow Jones)--U.K.-based banking giant HSBC Holdings PLC (HBC) will close its retail brokerage business in the United Arab Emirates from December and instead focus on institutional clients, a senior bank executive said Monday.
"HSBC in the U.A.E. is changing the focus of its equity brokerage business to focus on institutional clients. Retail brokerage business will no longer be undertaken from the end of November," Georges Elhedery, head of global markets at HSBC, said in emailed comments.
U.A.E. brokerages, which in the past made the bulk of their revenue from trading commissions, have been struggling as turnovers have sharply contracted amid heightened risk averseness due to an uncertain global economic environment.
Daily average turnovers on the Dubai Financial Market and Abu Dhabi Securities Exchange have dropped to a combined $67 million in 2011 to date, down from $112 million last year, $266 million in 2009 and $596 million in 2008, according to Zawya.com.
Elhedery said HSBC Middle East Securities will continue to offer institutional brokerage and the bank will retain its full brokerage license on both the Dubai Financial Market and the Abu Dhabi Securities Exchange. He added that no jobs would be impacted by the move and that additional resources would be positioned towards the institutional business.
"We believe that institutional volumes are likely to rise from their current low level, especially if the U.A.E. is successful in its bid to become part of the MSCI Emerging Markets Index. This would trigger the inflow of institutional money into the region, and they are likely to look to international brokers to fill this need," Elhedery said.
-By Nicolas Parasie, Dow Jones Newswires; +9714 446-1681; nicolas.parasie@dowjones.com
(Nikhil Lohade in Dubai contributed to this report.)
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
17-10-11 1024GMT
