Seven non-bank brokerage firms in the UAE are soon to merge to create an entity worth about AED1 billion ($272.3 million), a report said on Monday. Firms across the Gulf region have merged over recent months to boost their balance sheets and weather the fallout from the global financial crisis. “It would be better for four of five companies to merge to increase their capital and boost activities instead of their current situation with lower capital,” Ibrahim Al Zaabi, chief executive for Licensing and Enforcement at the Securities and Commodities Authority (SCA), told a local daily. The report did not say which firms are to merge. An official announcement is expected before the end of the year, it said. Talks between the brokerages, six from Abu Dhabi and one from Dubai, are soon to be completed, said Adel Al Hosani, managing director of Global Gate Financial Services, the firm leading the merger process. Last month, Dubai Holding, owned by the ruler of Dubai, and Emaar Properties said the Dubai developer would merge with three Dubai Properties, Sama Dubai and leisure developer Tatweer. In Qatar, the government has encouraged firms from livestock to real estate to merge to survive the downturn. A recent study compiled by Abu Dhabi's Truth Economic Consultants on 97 firms operating in the UAE has recommended that financial brokerage companies should go in for quick mergers so that they are able to face the threats posed by the ongoing global economic crisis. Consolidations would enable small brokerages to continue and improve tcapabilities of all companies, leading to better profitability.
