April 15th, 2001
The software wizards at TAIB Bank in Bahrain have come up with a solution that could revolutionise Arab stock markets. The idea is to create a vast open and liquid virtual stock exchange covering the whole Arab World.
'We have the technology in place to do this,' says vice president Syed M. Ali Jaffery, who heads up online share trading at TAIB Bank. 'The Bahrain stock market will probably be the first regional exchange to put share trading online, and then we can simple add on other regional markets. We are greatly assisted by the fact that all the stock markets of the region operate on the same platform'.
So the dream of one big united Arab stock market may not be the fantasy that some sceptics believe. For in creating its own online trading system, which went live four months ago, TAIB Bank discovered a way of linking up all the Arab bourses through the Internet. This means that a virtual Arab E-Financial Market, listing all the shares of the region, becomes technically not just possible, but rather easy to achieve.
'We showed our solution to the head of the Dubai Financial Market recently, and he immediately saw that the opportunity to link up the markets was there,' says Jaffery, whose www.taibdirect.com online service is the first of its kind to be offered by a Middle East bank.
'Of course, it will take time to bring the different exchanges together. But once the Bahrain stock market is online, we hope the others will follow. Then uniting the exchanges into one virtual trading floor is the logical next step'.
Bahrain based TAIB Bank has been something of a pioneer in developing online trading software, and has successfully launched its own Internet service by offering something different.
'Our online service finds the best price available for any stock,' claims Jaffrey. 'Other services do not necessarily give a share buyer the best price. We act solely as an intermediary and not as a market maker, so we always look for the best price rather than looking after our own book.
'This means that anyone making more than five trades a month will save considerable amounts of money by using our system. Obviously this factor is even more important in difficult market conditions. The cost of dealing and obtaining shares at the best price in the market becomes critical.'
Rather than try to offer a pan-regional service to online share traders, TAIB Bank is in the process of licensing its product to banks across the Middle East. The idea is that TAIB will operate the back office and trading operations, while local banks will offer a service to their customers branded to their own identity.
'We are close to signing up several banks,' says Jaffery. 'We did not want to spend a huge amount on marketing our service separately, and prefer to work with existing financial institutions rather than competing with them. We believe in a clicks-and-mortar approach to online share trading, and do not think entirely online solutions are appropriate to this market'.
From the point of view of software development, TAIB Bank has not invested hugely in proprietary software but has arranged deals which reward suppliers entirely on the basis of the volume of business. This means that the bank has not over-reached itself, and can cope with a slow market.
For the moment taibdirect.com offers dealing solely in US stocks, but plans are well advanced to include, European, UK and Indian shares as separate online services.
'The main hurdles we face are legal and not technical,' says Jaffery who describes computers as the passion of his life. 'We have a revolutionary product that is attracting a lot of interest from all around the world. Now we just have to see its development through'.
This patient approach to implementation, and a cost-conscious approach to its business development plan, could be what turns this particular e-vision into reality. It is to be hoped that the Arab bourses and the banks of the regions will quickly grasp this exceptional online opportunity to create a deeper and more transparent regional capital market.
-Ends-
For more information, please contact:
Ali Jaffery
Tel: 537267
Fax: 533590
email: alijaffery@taib.com
© Press Release 2005
