Smartphone penetration gives UAE the edge in real-time trading

A recent study by Google Inc. found that the smartphone penetration in the United Arab Emirates is 62 per cent. One of the highest smartphone penetration rates on earth. The country is far from peaking with penetration rates expected to reach 71 per cent with 3,752,100 owners by 2016. Therefore, it seems only natural that one of the latest trends amongst UAE share traders is buying and selling stocks with their devices.

One of the factors that is driving the increased use of stock trading with smartphones is convenience.  Investors can check stock movements, buy and sell stock and check their portfolios performances simply by accessing the apps on their phones. A second factor behind the increasing use of smartphones by UAE traders is the enhanced security features that come with the newer trading apps.

Most of these apps have password protection, which secures stock account information.  A third reason that smartphone use by UAE traders is increasing is the rapid growth of the country’s three major stock markets, the Dubai Financial Market (DFM), the Abu Dhabi Securities Exchange (ADX) and the Nasdaq Dubai.  The presence of these major stock markets has provided an alternative investment choice for investors looking to diversify their investments.

The DFM and the ADX are traditional stock markets that trade stocks in the UAE and other Middle Eastern countries; the Nasdaq Dubai was designed to trade international stocks. The growth of these three markets has been encouraging to UAE investors: all three of these exchanges are experiencing explosive growth with ever higher rates of trading volumes. For instance, the largest of the three stock markets, the DFM, has seen its General Index advance (YTD) by 43 per cent just in 2013, while the Abu Dhabi Security Exchange (ADX) General Index is up 32 per cent (YTD). Shares of the 128 stocks on the UAE stock markets (DFM and ADX) have been bolstered by recent news that the MSCI will be upgrading the status of UAE stock markets from frontier market status to emerging market status. For UAE investors, this is a big deal because it is likely to attract foreign investors to invest in the country’s stocks.

Malek Kanawati, CEO of Mubasher – the UAE’s pioneer in mobile trading – commented: “The UAE is seeing a convergence of all the major factors that create an encouraging environment for mobile trading. These range from user-friendly interfaces, optimal flexibility, enhanced security and real-time access to the markets 24/7. Besides this, there is also the anticipated influx of foreign investors following the MSCI’s upgrading of UAE stock markets from ‘emerging’ to ‘frontier market’ status. There has never been a better time to embrace mobile trading.”

Mubasher has already ushered the industry towards next-generation customized apps for iPhone, iPad and Android via the mobile web app, covering the full spectrum from ordinary handheld phones to the latest smartphone devices.

As a result of the widespread use of mobile devices, the increased interest by UAE citizens in the stock markets and the efforts by brokerage firms to provide smartphone trading apps, the use of smartphones to buy and sell stocks has grown dramatically.

Kanawati added: “It comes as no surprise that the UAE has one of the highest smartphone penetration rates, with estimates of 2.4 mobile phones per person. The residents are certainly early adapters when it comes to new technologies.  With our clients, we have seen a major shift towards mobile trading; more and more clients are opting to trade via their smartphones than ever before.”

In addition to the DFM office, there are a number of multiproduct UAE based brokerage firms.  These firms allow their customers to buy and sell stocks, bonds, futures, currencies, forex, gold, oil, silver and more from their smartphones.

While it is great that the UAE stock market is moving higher on increasing volume, many of the country’s investors are also interested in foreign stocks. These are sophisticated investors that also like the convenience of using their smartphones to buy and sell international stocks.

Growth is inevitable because it is clear that using a smartphone is a convenient and flexible way to trade stocks and stay abreast of stock market news to make informed trading decisions

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