UAE Brokerage. Consolidating Fortunes. Marmore Industry Reports Research highlights:

Transcription

1 Marmore Industry Reports 2016 UE Brokerage Consolidating Fortunes highlights: This report analyzes the UE brokerage industry, the challenges faced and growth drivers of the industry. The report also examines the leading brokerage firms, the revenue generated by the industry players and forecasts future revenue. 1

2 MRMORE INDUSTRY RESERCH UE Brokerage February 2016 M.R. Raghu CF, FRM Head of Karthik Ramesh ssistant Vice President Nivas Lakshminarasimhan nalyst Support Jenevivu Lasrado Executive Secretary, Nataraj Balakrishnan dministration Manager Disclaimer This report has been prepared and issued by Marmore MEN Intelligence Ltd (Marmore), a fully owned research of Kuwait Financial Centre Markaz K.P.S.C. Marmore is a private limited company registered with the Registrar of Companies in India. This Report is owned by Marmore and is privileged and proprietary and is subject to copyrights. Sale of any copies of this Report is strictly prohibited. This Report cannot be quoted without the prior written consent of Marmore. ny user after obtaining Marmore's permission to use this Report must clearly mention the source as Marmore." The Report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable, but no representation or warranty, expressed or implied, is made that such information and data is accurate or complete, and therefore should not be relied upon as such. Opinions, interpretations, estimates, and projections in this report constitute the current judgment of the author as of the date of this Report. They do not necessarily reflect the opinion of Markaz or Marmore or other identified parties and are subject to change without prior notice. Neither Marmore nor Markaz have an obligation to update, modify, or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast, or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. This Report may not consider the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors are urged to seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and to understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security s price or value may rise or fall. Investors should be able and willing to accept a total or partial loss of their investment. ccordingly, investors may receive back less than originally invested. Past performance is not necessarily indicative of future performance. Markaz may seek to do business, including investment banking deals, with companies covered in its research reports. Markaz may have interests in the areas covered in this research report. Markaz, Markaz managed entities, its clients, or its employees may have from time to time long or short positions in any security, derivative or other types of assets referred to in this research report. s a result, investors should be aware that Markaz may have a conflict of interest that could affect the objectivity of this report. This report may provide the addresses of or contain hyperlinks to websites. Except to the extent to which the report refers to website material of Markaz and Marmore, Markaz has not reviewed the linked site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to Markaz s or Marmore s own website material) is provided solely for your convenience and information, and the content of the linked site does not in any way form part of this document. ccessing such website or following such link through this report or Markaz s or Marmore s website shall be at your own risk. For further information, please contact Markaz at P.O. Box 23444, Safat 13095, Kuwait; info@e-marmore.com; Tel: ; Fax:

3 Table of Contents MRMORE INDUSTRY RESERCH UE Brokerage February Executive Summary Brokerage Sector Overview... 7 Overview Brokerage Services UE Stock Market n Overview UE Brokerage Sector nalysis Forecasted Commission Major Players and Peer Comparison Challenges Brokerage Industry Regulation Growth Drivers Stand-alone to Emerging Markets SWOT nalysis ppendix Brokerage Model

4 Tables and Charts MRMORE INDUSTRY RESERCH UE Brokerage February 2016 Tables Charts 2.1 Broker Count 1.1 UE Forecasted Commission and Value Traded 2.2 Value Traded in USD Bn 2.1 Value Traded and Brokers Count (2015) 2.3 verage Value Traded Per Broker (USD Bn) 2.2 Middle East Investors sset llocation Market Cap to GDP Ratio (%) 3.1 HNWI Mobile Usage (Wealth Management 2013) 3.1 Commission Structure 4.1 Dubai and bu Dhabi Indices Composition 4.1 Top 5 Blue Chips, UE (DX & DFM) 4.2 Dubai and bu Dhabi Index Level and PE Ratio 4.2 Top Daily Value Traded in UE Exchanges 5.1 Traded Market Value and Traded Volume 4.3 Dubai and bu Dhabi Indices Return, Top 10 Brokerages in UE (% of Total Value Traded) 5.1 Indicators to Estimate the Commission 5.3 UE Forecasted Commission and Value Traded 6.1 Major Players Details 7.1 Stock Turnover Ratio 6.2 Value Traded (in USD Bn) & Ranking 7.2 MEN Rankings 6.3 Volume Traded (in Bn) & Ranking 7.3 DFM Volume Traded by Category, Q No Of Trades (in 000 s) & Ranking 7.4 DFM Volume Traded by Geography and Foreign ownership as a % of Total Market Cap, Q Summary of services provided by top 10 Brokerage firms 7.5 Sector Weightage, Dubai Financial Market 6.6 Summary of Brokerage related services Sector Weightage, bu Dhabi Securities 7.6 provided by top 10 Brokerage firms Exchange 6.7 Services By Top 10 Brokerage Firms 8.1 UE Regulatory Structure 7.1 Coverage 9.1 Foreign Ownership Levels of Key Markets 9.1 Number IPO Issues Country Wise 11.1 Brokerage Model Parameters 9.2 IPO Issues Country Wise (Value in USD Mn) 9.3 Current Stance of MSCI 4

5 MRMORE INDUSTRY RESERCH UE Brokerage February Executive Summary Despite declining since 2009, UE (49 brokers) still leads the region in terms of number of registered brokers. Brokerage sector in the region is one of the most fragmented industries. Despite declining since 2009, UE (49 brokers) still leads the region in terms of number of brokers that are registered and allowed to trade in the stock exchange. It is also the only country in the region to have more than 1 stock exchange (Dubai Stock Exchange, bu Dhabi Stock Exchange and NSDQ Dubai). The classification of and UE as emerging markets by MSCI has resulted in increased turnover in these markets. Many players, including brokerage divisions of major banks, and standalone firms offer full services such as provision of single window for investing in the six countries. Web and PC based trading platforms have been able to make long strides in the UE over the past few years, primarily due to their convenience. Compared to 2014, market activity in 2015 has been sedate with liquidity dropping to almost a third of what it was in the year before, given the negative investor sentiment due to lower oil prices. This has led to fears of further broker consolidation, with top players looking for opportunities to expand horizontally. By the end of 2015, many firms indicated that they would readjust their budgets for the coming year as they expected trading activity to be sedate. By end of 2015, many brokerages indicated that they expected trading activity to be sedate in the coming year. The commission charged by the brokerage firms in UE is set at 0.15% of the value traded by the stock exchange. Based on the value traded in 2014, the commission earned by the brokerage firms in 2014 is estimated at USD 448mn which declined significantly in 2015, owing to the fall in trading activity but is expected to increase until The top 10 UE brokerage firms account for over two thirds (67.5 per cent) of the value traded, and the industry is regulated by the Securities and Commodities uthority (SC). s per regulations, SC has the authority to license markets and brokers, and authorize listing of securities and commodities, for trading in the market. Decreasing stock turnover, brokerage consolidation, and underdeveloped corporate governance regulations compared to developed markets, lack of 5

6 MRMORE INDUSTRY RESERCH UE Brokerage February 2016 Shallow depth of the market and sparse analyst research are key challenges hindering the growth of UE equity markets. institutional participation, shallow depth of the market and sparse analyst research are some of the key challenges hindering the growth of the equity capital markets in the UE, and in turn impacting the brokerage industry s revenue. Strong IPO activity, MSCI re-classification from standalone market to emerging market, openness to foreigners buying shares directly and stronger regulatory framework are some of the opportunities that the UE brokerage industry is likely to benefit from. Cost of the full report: $250 For payment details please write to: info@e-marmore.com Or Kindly use our online payment gateway at 6

7 Library (Complimentary ) Capital Markets Kuwait Stock Market Outlook (2016) Stock Market Outlook (2016) Stock Market Outlook (2016) UE Stock Market Outlook (2016) WCC (2015) Berkshire Hathaway (2015) pple (2015) Mother of ll IPOs - National Commercial Bank (2015) Saudi rabian Markets Set to Open (2014) MEN sset Management Policy Perspectives (2013) Including in the MSCI EM Index (2012) lpha bound: Study to explore lpha generation in (2012) Kuwait Investment Sector (2012) Defensive Bellwether Stocks (2012) Kuwait 15 Index (2011) SWFs: The Golden Portfolio (2010) Persistence in performance: The Experience (2010) Will catch up with GEM? -What is left for 2009 This Too Shall Pass: What can we expect in 2009 for Markets? (2009) Missing the rally (2009) Fishing in Troubled Waters (2008) Down and Out: Saudi Stock Outlook (2008) Mr. Market-Manic Depressive (2008) To Yield or Not To Yield: Examining the Potential of Yield Stocks in (2008) China and India: Too Much Too Fast(2007) Kuwait sset Management Industry (2007) Gulf Emerging Portfolio: nd Why Not? (2007) Derivatives Market in (2007) Managing Volatility (2007) Regulatory Regulatory Digest (Semi-nnual) Kuwait s new Law on Preference Shares (2015) Kuwait's BOT law (2014) Land Reforms in Kuwait (2014) Kuwait s PPP Law (2013) Bankruptcy Law in the (2013) Got a CM (Kuwait): What Next? (2012) The New Regulations for Kuwait Investment Sector (2010) Wanted: Kuwait Capital Market uthority (2010) To Leap or To Lag: Choices before Regulators (2007) Economic Top Risks for 2016 (2016) Top Economic & Investment Themes for 2016 UE,,, Kuwait Emerging Markets (MSCI) Threat of a Debt Crisis (2015) Liquidity Fall (2015) Is China Stalling? (2015) Crowdfunding in the (2015) Iran Nuclear Deal (2015) Kuwait Dealing with Construction Permits (2015) Dubai Government Summit 2015 (2015) Negative Interest Rates (2015) Central Bank Shocks (2015) Fiscal Breakeven Oil Price (2015) Kuwait starting Business (2015) Kuwait Electricity Tariff Hikes (2015) Basel III Norms (2015) Kuwait Real Estate (2015) Swiss Franc (2015) Cheaper Oil (2015) Rising Fuel Prices in Kuwait (2015) Knowledge Gap (2014) Cloud Computing (2014) Free Trade Zones (2014) Disruptive Technology: Bitcoins (2014) Kuwait SME s (2014) Policy Kuwait Reforms (Series) - Education Oil & Gas Markets and the Emergence of New Resources (2014) Countries & sia: Bolstering Energy Ties (2014) Energy Strategies: The Way Forward (2014) Blueprint for Public Sector Good Governance in Kuwait (2013) Kuwait - Private Labor Market (2013) Kuwait - lternatives for Power Generation (2013) Kuwait - Sustainable Power Strategy (2012) Tools to Strengthen & Support Kuwait's Private Sector (2012) Daily Morning Brief Kuwait Daily Monthly MEN Markets Review International Market Update Quarterly Marmore Bulletin Half yearly Regulatory Digest Corporate Earnings WCC nnual Periodic Reports Stock Market Outlook Fixed Income Update UE,,, Kuwait

8 Library (Paid ) Power Egypt Kuwait Ports Kuwait viation Infrastructure * Low Cost Carriers Water Kuwait ICT UE Roads and Railways Real Estate Office RE ffordable Housing MEN (Ex- ) UE UE Oman Full Service Carriers Kuwait UE Kuwait Office RE Residential RE, UE,, Industry * Private Equity Brokerage, UE Offsets in the Healthcare,, UE Education,, UE Family Business Wealth Management, UE Banking Kuwait,, UE, Hospitality, Retail, ; Luxury -, Kuwait, UE; Online sset Management MEN,, UE, Egypt Islamic Finance Investment Banking, UE Insurance, Media, UE Social Media, UE Petrochemicals, Kuwait, Contracting Kuwait,, UE Metals & Mining Women Investors l Rajhi Bank Company Reports* lmarai Group Company for Cooperative Insurance (Tawuniya) Jarir Marketing Co. National Commercial Bank (NCB) Riyad Bank SBIC Samba Saudi rabian Fertilizers Co. Saudi rabian Mining Company Saudi British Bank Saudi Cement Company Saudi Electricity Co Saudi Telecom Savola Group TSNEE National Industrialization Company The National Shipping Co. of Saudi rabia BHRI Barwa Real Estate Co QSC Commercial Bank of Ooredoo Electricity and Water Company Insurance Co National Bank UE bu Dhabi Commercial Bank bu Dhabi National Hotels Co ir rabia ldar Properties PJSC rab National Bank rabtec Holding Company ramex Dubai Islamic Bank EMR Properties Emirates NBD Emirates Telecom First Gulf Bank National Bank of bu Dhabi *Paid reports ranging from US$100-$500

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