Trading Middle East gains a following

Few people will have heard of Trading Middle East, and that is perhaps as the members of this online forum would have it.

Shehzad Janab, the head of asset management Daman Investments, top left, says online banter has its benefits.

The words that flicker across the screen are similar to those appearing in chat rooms around the region at the start of another work day.

"Should I come down with a 'headache' and head to the beach?"

"I was assuming your were logged in from your BB [BlackBerry] while sipping orange juice from the beach."

But then the chatter turns to the short-term economic outlook in the GCC, the activity of international money managers and rumours about individual stocks.

"International trends and regional trading volumes are a bit stinky … people I speak to offer different outlooks, some are offering an upbeat forecast but also warning of the lack of volumes, could deter international funds from rotating money back into regional markets (Qatar excepted, although Doha is a little overdone now?)," the chat continues.

Before long, trades are being made.

A year on from the launch of the Middle East's first virtual stock market trading floor, investors based in the Gulf have transformed the way they do deals.

Trading Middle East, a chat room that operates from Dubai, allows some of the most influential traders and analysts in the region to share their opinions and piece together transactions.

"It's an intelligent conversation rather than with someone who doesn't know anything. It's direct and people can use the information and take it to their client," says Mohammed Ali Yasin, the chief investment officer at CAPM Investment and a participant in trading chat rooms.

The forum differs from the usual instant messaging available on Reuters and Bloomberg terminals because, rather than the one-on-one, business-driven conversation between a broker and client, a community of investment experts has been built up, streaming information and gossip.

Thomson Reuters set up Trading Middle East and similar chat rooms in India, China, Brazil and Russia, and so far, the entire network has attracted more than 4,000 traders looking to buy and sell shares on regional markets.

"There's a lot of wishing each other 'good morning', and that's how it usually gets going," says Mark Jones, who oversees Thomson Reuters' global chat communities from Dubai.

The online chat room is the 21st century's response to the smoky coffee houses of the 18th century, where people would gather, exchange information and put deals together.

"Not just anyone can join, because the information published is often highly sensitive," Mr Jones says.

"People would not feel comfortable to share information with just everyone, and we don't want them to get professionally embarrassed. If you get that right, some great stuff happens, and I'm always surprised by the different things that happen on the forum."

When the Omani mobile-telephone company Nawraswas launching its initial public offering (IPO) in September, those involved in the flotation used the chat room to gauge interest from traders.

"Morgan Stanley was trying to get interest on the IPO and put a couple of paragraphs about the price potential for the company," says Mr Yasin, a regular on the forum. The conversation is "direct and people can use the information and take it to their client".

Speculation that the Abu Dhabi developer Aldar Properties would receive government funding also caused excitement on the Trading Middle East chat room.

"That was a lively day," says Shehzad Janab, a Trading Middle East regular who is the head of asset management at Daman Investments. "People kept talking about Aldar, getting tips and buying the stock because they thought it was about to get a load of money."

But in the days after the builder's shares rose nearly 7 per cent, the most in a month, the conversations became more subdued.

"When there is not much to talk about in the markets, one tends to discuss different topics … the football," says Mr Janab.

"It's not always about 'what do you think of the market'?"

Naturally, not everyone contributes to a typical conversation, although there are on average 250 traders, investors and analysts on Trading Middle East during the UAE market hours of 10am to 2pm.

"I don't participate in the chatting much and just read around. The buy side is more silent and the sell side show how much information they have," says Samer al Jaouni, the general manager at Middle East Financial Brokerage.

Of course, there are times when Mr al Jaouni gets caught up in the excitement, such as when Qatar was selected to host the 2022 FIFA World Cup. "That day there was an interesting discussion and everyone participated," Mr al Jaouni says. "Even I wrote a few sentences about expectations and what might happen in the market."

Private messaging is also a big part of the chat room because it often leads to a deal being made, while users can invite others to discuss more specific topics such as fixed income or equities.

"It is a good way to attract business," Mr al Jaouni says.