Shuaa in final phase of shutting retail share-trading business

Shuaa Securities has started the process of transferring client accounts to third party brokers, marking the final phase of shutting its retail share-trading business.

Shuaa Capital, the Dubai-based investment bank and parent company, will retain institutional clients and high net worth clients, acting as advisers and executing share-trades through another company.

"We are encouraging clients to go and find someone else to do brokerage with," said Oliver Shutzmann, the spokesman at Shuaa Capital. "We have been in talks with the regulator, there is a process we have to follow. We are in the final stages of closing retail brokerage."

Shuaa Capital is in the process of drafting an agreement with another brokerage to execute trades for their clients, said two sources familiar with the matter.

"Once we exit, we will have to go through a third party broker licensed on the exchange," said Mr Schutzmann.

Shuaa was hit hard after the global financial crisis wiped the value off assets and cut access to credit. The investment bank, which has recorded five consecutive quarters of losses, said it expected to "generate between a net profit of Dh6 million [US$1.6m] and a loss of Dh18m next year."

Net loss in the third quarter stood at Dh13.9m, from a loss of Dh156.2m in the same quarter last year. The company's guidance estimates a loss of Dh40m to Dh60m for the full year.

Many brokerages closed UAE operations last year after the Arab Spring and European debt crisis reduced trading volumes.

The value of equities traded by UAE brokerages declined 45 per cent to Dh57 billion last year, compared with the same period in 2010.

There are 49 brokerages in operation, according to trading reports compiled by the Abu Dhabi Securities Exchange and Dubai Financial Market, down from 57 companies in the start of the year and 103 at the beginning of last year.

Shuaa Capital in 2006 acquired Emirates Securities, the oldest brokerage to operate in the country, and rebranded it as Shuaa Securities.

Shares of Shuaa Capital declined 4.4 per cent to 51 fils each. About 2.8 million shares changed hands yesterday.