It’s no secret that the number of brokerages in the UAE has been shrinking as both large and smaller players struggle against a sustained period of low trading volumes. However, the second half of this year could add to the bloodbath.
There was a rally in trading activity in the first quarter of this year, to a peak of AED981m in March, but it was a return to depressed volumes in the second quarter, which has many firms on tenterhooks.
"Everyone is really scared," Ahmed Dibajeh, a broker at Investor Financial Brokerage in Abu Dhabi told The National. "The situation is very bad because there isn't enough investor money to go around and because of the continued pressure on the financial situation of many of the brokerage companies."
More worryingly, some are anticipating another 20 brokerages could close before the end of this year. As this figure has already shrunk from 110 two years ago to 50 now, this means just 30 will be left by the end of 2012.