Brokerages to more than halve this year

The number of stock brokerage firms in the UAE will be reduced by more than half this year as most will be either shut down or merged in the wake of low volume and dwindling revenues, said a prominent stock market functionary.

"UAE brokerage firms will end up in the range of 30-40, out of about 100 functioning now, while the rest will merge or shut down in the current market climate," Shehab Gergash, Managing Director of Daman Investments, told Emirates Business.

He said a large number of brokerage firms cannot remain sustainable and the large drop in the turnover in the markets led to a sharp drop in their revenues. He said the global financial crisis in the markets is not over and a cleanup job should be done.

"There are admittedly a lot of firms in the UAE, too many for the size of the markets, and we expect a sharp drop in the number of brokerage firms. I believe that UAE stock markets will end up with 30 to 40 brokerage firms."

Gergash hinted at a lot of merger talks among brokerage firms in the country. "We are seeing a lot of merger talks in the market or a lot of firms are cutting down their staff," he added.

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