Global markets rallied on hopes of a blue wave in US Presidential elections. Expectations are that a Biden win could lower trade tensions and the introduction of a large fiscal stimulus.
In UAE, the DFM closed higher on Monday by 0.50 per cent and ADX was in the black by 0.89 per cent. It is not that all companies have lost business as results of the pandemic - there have seen notable winners too. One financial company that has seen a significant turnaround in its operations is BH Mubasher.
It’s revenues have surged on the back of a host of licenses it received this year from regulatory bodies in the UAE. BH Mubasher Financial Services PSC (previously Al Safwa Mubasher Financial Services PrJSC) operates mainly as an intermediary in shares, stocks, debentures and other securities.
The company has one subsidiary, Al Safwa Islamic Financial Services, incorporated in Sharjah and whose principal activity is to hold investment properties and securities. BH Mubasher has seen a significant turnaround and in the second quarter posted the highest ever quarterly revenue since the fourth quarter of 2015.
It did revenues of Dh11 million and, more importantly, a profit of Dh3.1 million. The company had posted a loss in six of the last seven quarters. The turnaround came as the company was granted a market maker license in ADX and DFM this year.
It also got an investment management license from SCA. BH Mubasher received a margin trading license from ADX and was also appointed as a liquidity provider by Union Properties. In fact, BH Mubasher is a partner for all major initiatives in UAE.
The equity futures platform to be launched by DFM on October 18 will have the company as one of the partners. The initiatives seem to have worked for the company and the it also benefited in the rise in trading volumes across the region.
With interest rates at record low and wide expectations that the dollar will weaken, there could be a rise in demand for UAE equities. The equities of the region are already a part of benchmark indices like Russel and MSCI, which have raised their profile. BH Mubasher with a strong research team and a technologically superior platform should benefit from these trends.
- Vijay Valecha is Chief Investment Officer at Century Financial.