Finance Magnates spoke with Philippe Ghanem, Vice- Chairman and Executive Managing Director ADS Securities, for his stance on the firm’s regional prospects as well as the future of business in the Middle East.
What are the advantages of being located in Abu Dhabi, namely in regards to procuring regional clients as well as liquidity?
Our headquarters are in Abu Dhabi, which provides us significant advantage. We are situated in the GMT+4 time zone so we trade across the Asian, European and North American markets. The region is also very well capitalised which gives us the ability to invest in technology and services.
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However, like all global brokerages, access to clients and liquidity is dependent on where our technology is placed. For this reason we have servers in the key market centres of New York (NY4), London (LD4) and Tokyo (TY3). In Tokyo we have some of the fastest network cards in use by any FX providers.
With our technology in these centres we are collocated with the main liquidity providers and can get the spreads that clients are looking for. We also have a regional HQ in Hong Kong, which operates under the guidance of the SFC, and provides a genuine footprint in the region.
Do you think brokers or liquidity providers hesitate when approaching the Middle East from a retail client business perspective? How can they approach the MENA market?
We have specialised teams in all our main markets and we get very few clients who are concerned about being on-boarded in Abu Dhabi. They look at ADS Securities and see that we are regulated by the Central Bank of the UAE, the Financial Conduct Authority in the UK and the Securities Futures Commissions in Hong Kong, so they see us as a well-run and transparent company.
If brokers are looking at the MENA market we offer an almost unrivalled service. We have the client support, languages and research, as well as specific regional products including GCC equity CFDs.
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Do you feel that Abu Dhabi and the UAE can eventually ascend as a global industry hub much as we have seen in say London or Tokyo?
London and Tokyo have been financial centres for many years and it is unlikely that Abu Dhabi will achieve the same level of trading as these markets, certainly not in the medium term. However, in the short-term Abu Dhabi can become an important contributor to the global financial highway. The upgrading of the UAE to MSCI emerging market status last year was an important step forward and the increased volume of trading through companies like ADS Securities is making a big difference.
Abu Dhabi’s ability to manage flows between the major markets and keep investing in the services it provides is very important. The events like the Swiss National Bank (SNB) crisis in January reaffirmed the advantage of having very well capitalised brokerage, which has a long-term view of the market.
Are there any specific trends or trading needs that you have noticed or discerned in the emerging assets realm?
It is very clear traders are now looking for multi-asset investment options. If they trade the majors they are also looking for CFDs, futures and equities to hedge their positions. They want to be able to go to a single platform and have risk and margin calculated across asset class.
There is a requirement to offer emerging market assets but they need to offset the potential risks of these investments with highly competitive spreads across main market assets. The sophistication of investors is increasing all the time and brokerages must adapt to meet this.
What is your evaluation of the retail business side in London?
We entered the London market having first gained direct FCA regulation. It is a very competitive market, which requires excellent pricing as well as specialist products, and we wanted to approach it in the right way. We launched our retail offer a couple of months ago and are very pleased with the way this has gone.
We will expand our markets, products and positioning through the year and use the advantages we offer in terms of pricing and client support, as well as technology. Our real-time reporting and risk management will be a significant benefit to IBs and clients alike.
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