Menacorp has announced that it is introducing its short selling service to its clients in a bid to grow their wealth and help them optimise investment opportunities in the local market.
Menacorp is the latest prominent financial service firm in the UAE to introduce short selling service to the market after securing the needed regulatory approval. The company began the process of introducing the service in 2017 when the Abu Dhabi Securities Exchange passed laws and regulations concerning short selling to attract specialized foreign investors, boost liquidity levels, and offer diversified investment and hedging instruments.
“Menacorp is pleased to offer our clients more financial tools to trade from both sides of the market and grow their wealth. Short selling can be utilized by investors as a hedging mechanism, while maintaining exposure to the equity market and benefitting from irrational valuation matrix,” said Fathi Ben Grira, chief executive officer, Menacorp.
Short selling involves the sale of borrowed stocks at the current market price with an intent of buying the same shares at a cheaper price at some point in the future. Keeping the difference as a profit, sellers take on short selling transactions if they believe that a stock’s price will go down instead of up. Normally, only experienced, long-time traders embark on short selling because of their familiarity with the risks.
Grira said: “Short selling increases market sophistication and stimulates high interest from more experienced foreign investors in the local market. Introducing this mechanism is in keeping with the UAE’s strategy to increase foreign direct investments into the country as it diversifies its economy away from oil. Our short selling service is also our way of providing our clients with a comprehensive suite of financial products to enable them to profit from market movements.”
Menacorp is the only UAE-based financial services firm to offer access to all UAE markets, including Dubai Financial Market (DFM), Abu Dhabi Securities Exchange, Nasdaq Dubai, and Dubai Gold and Commodities Exchange. From 2013 till first half of 2016, Menacorp has remained number one on DFM in terms of trade volume and market share. In addition, it provides one of the best online trading for international markets such as the United States, Europe, and 19 other exchanges on one platform. Clients can trade commodities with Menacorp through the latter’s Dubai Gold and Commodities Exchange license to benefit from uncorrelated asset class.