Is there more pain to come for UAE brokerages?

Brokerages in the UAE have, of course, had a tough time over the last two years, with slumping trading volumes leading to mass closures and heavy redundancy announcements. Could there be more to come?

In the first quarter of this year, despite the uptick in trading volume on UAE bourses, brokerages lost a collective AED10m. It’s questionable how much longer some firms can survive without a boost to revenues very soon.

The companies that are still operating are living on reserves, and those who will stay the longest are the ones with the biggest reserves," Mohammed Ali Yasin, an independent analyst in Abu Dhabi told The National. "As a business model, [the brokerage idea] doesn't work based on the figures from the past three years. People who have been longer know there's a cycle, but who has the patience?”

Yesterday, Arab German International Brokerage, an Abu Dhabi-based firm, shut up shop, meaning there are now just 49 active brokerage firms in the UAE, down from 103 in 2010. How many more will topple?