ABU DHABI // The Federal National Council called on the stock market regulator to review financing after individual investors in the UAE lost millions of dirhams in the recent turmoil.
Members urged Sultan bin Saeed Al Mansouri, chairman at the Securities and Commodities Authority (SCA) and Minister of Economy, to implement regulations requiring banks to comply as brokerages do with regards to lending against shares.
Stockbrokers regulated by the authority cannot exceed the one-to-one ratio on margin accounts. Banks regulated by the Central Bank that are not under the umbrella of the SCA provide overdrafts that can provide higher exposure than brokerages.
Mr Al Mansouri said a new law was in the works that would increase fines on brokerage firms that exceed the limits allowable. Fines are currently Dh100,000. The proposal would raise them to a maximum of Dh10 million. The regulations would further cover breaches on corporate governance and potentially publicly reveal the identities of investors – individuals or entities – who have broken the law.
FNC members criticised the SCA after banks provided up to 10 times leverage on the initial public offering of Dubai Parks & Resorts and unexpectedly changed the allocation of shares from the prospectus.
“Some people lost Dh2m, Dh3m and Dh4m when they only owned Dh1m,” said Dr Yaqoub al Naqbi (Sharjah).
“The leverage offered on Dubai Parks was up to 10 times. I know a Syrian individual who took his hard-earned money of 20 years, which was about Dh1 million, and subscribed to the IPO. But when the company changed the percentage allocated for retail investors, foreign and institutional investors, his holdings were diluted incredibly and the bank forced him to sell. One old man came to me, crying. I asked him what can I do? Go to the SCA.”
Media reports have recently focused on margin calls, when banks force highly exposed clients to sell their shares instantly when they drop below a certain threshold.
Brokerage firms, on the other hand, are required to review margin transaction accounts at the end of each working day and notify the client to cover the account within two working days. If they fail, then the broker enforces the sale of shares.
Ahmed Al Ahli (Dubai) called for the introduction of short selling, the practice of selling borrowed shares in the hope of buying them back at a lower price, returning them to the original owner and keeping the difference.
Brokers last month said foreign investment banks were making short sales on local stocks.
“We all know this, and we should admit we have a problem here,” Mr Al Ahli said. “I don’t understand why we don’t want to admit this. When the market crashes for a select number of entities at the expense of many ... some people lost money, investors, traders because this tool is not available to everyone. We need to find a solution, otherwise our market will go up and down in a crazy way.”
Mr Al Mansouri reiterated that short selling was illegal.
“Despite the regulations introduced by the watchdog, only market makers are allowed to short sell,” he said. “NBAD, the licensed market maker, has yet to assume these practices.”
Mr Al Ahli urged the minister to look at Arabtec, whose stock price plummeted after its chief executive, Hasan Ismaik, stepped down and hundreds of people were made redundant.
Arabtec’s turmoil prompted the SCA to create a committee to track statements by executives and their impact on the stock price as Mr Ismaik was seen to be increasing the stock price and accumulating shares in Arabtec.
Investors were concerned that Arabtec’s main shareholder, Aabar, would take Arabtec private, as Ipic, Aabar’s main shareholder, did with Aabar.
“We know some people are untouchable,” Mr Al Ahli said. “Some people say Arabtec is Aabar, tomorrow they can delist us from the market.”
halsayegh@thenational.ae
osalem@thenational.ae
US Industrial Market figures, Q1 2017
Vacancy Rate 5.4%
Markets With Positive Absorption 85.7 per cent
New Supply 55 million sq ft
New Supply to Inventory 0.4 per cent
Under Construction 198.2 million sq ft
(Source: Colliers)
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
Avatar%20(2009)
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The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
If you go
The flights
Emirates flies from Dubai to Funchal via Lisbon, with a connecting flight with Air Portugal. Economy class returns cost from Dh3,845 return including taxes.
The trip
The WalkMe app can be downloaded from the usual sources. If you don’t fancy doing the trip yourself, then Explore offers an eight-day levada trails tour from Dh3,050, not including flights.
The hotel
There isn’t another hotel anywhere in Madeira that matches the history and luxury of the Belmond Reid's Palace in Funchal. Doubles from Dh1,400 per night including taxes.
UAE SQUAD
Khalid Essa, Ali Khaseif, Fahad Al Dhanhani, Adel Al Hosani, Bandar Al Ahbabi, Mohammad Barghash, Salem Rashid, Khalifa Al Hammadi, Shaheen Abdulrahman, Hassan Al Mahrami, Walid Abbas, Mahmoud Khamis, Yousef Jaber, Majed Sorour, Majed Hassan, Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Khalil Al Hammadi, Fabio De Lima, Khalfan Mubarak, Tahnoon Al Zaabi, Ali Saleh, Caio Canedo, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
Rock in a Hard Place: Music and Mayhem in the Middle East
Orlando Crowcroft
Zed Books
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Habib El Qalb
Assi Al Hallani
(Rotana)
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Januzaj's club record
Manchester United 50 appearances, 5 goals
Borussia Dortmund (loan) 6 appearances, 0 goals
Sunderland (loan) 25 appearances, 0 goals
Company%20profile
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Funk Wav Bounces Vol.1
Calvin Harris
Columbia
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
UAE currency: the story behind the money in your pockets
