Dubai's Shuaa axes more staff as part of 'rightsizing'

Markets Update: Dubai Shuaa Capital scaled back its research department, making five staff members redundant and redeploying others.

Shuaa Capital scaled back its research department, making five staff members redundant and redeploying others, as the Dubai investment bank cuts costs, the company said.

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"We have scaled back to reduce costs, in line with Shuaa's rightsizing program and repositioning of the brokerage platform," Oliver Schutzmann, the company's chief communications officer.

Shuaa Capital is moving away from the retail brokerage business after markets in its home base declined and losses mounted. The company, which hired former Credit Suisse Group board member Michael Philipp as chief executive officer in October, said in November a first phase of job cuts would affect 29 people. The company had a third-quarter loss of Dh156.2 million dirhams ($42.5 million) after booking provisions.

Shuaa plans to expand its asset management and advisory business in Abu Dhabi, Saudi Arabia and Kuwait and will focus on high net-worth family businesses and small- to medium-sized companies as well as institutional clients, Philipp said in October.

Markets in the Middle East have been hurt by uprisings that ousted leaders in Tunisia, Egypt and Libya and amid fears Europe won't be able to contain its debt crisis. Fees earned by banks in the region fell 42 per cent to $320 million in the first nine months of last year from $551 million during the same period in 2010, according to New York-based research firm Freeman & Co.

Shuaa shares dropped 0.4 per cent to 47.3 fils yesterday, the lowest close since November 2001. The stock tumbled 56 per cent in 2011, compared with a 17 per cent decline in Dubai's DFM General Index.

Tamara Walid and Zahra Hankir // Bloomberg News