(MENAFN - Khaleej Times) Dubai Financial Market Company on Saturday declared more than 400 per cent increase in its net profit for the first nine months of the year, compared to same period last year.
Top officials of the company attributed this significant increase to the expansion of margin trading that created more liquidity and boosted trading value by more than 46 months in the first three quarters of the year.
"Since the beginning of this year, the DFM Company has relentlessly endeavoured to create a thriving and supportive environment with the aim to restore normal market activity. For this purpose, we have accredited three new brokerage firms for margin trading in 2012, compared to one company to the previous year, raising the total number of DFM-licensed brokerages which offer this service to their clients, to four," said Abdul Jalil Yousef Darwish, chairman of Dubai Financial Market. This is expected to leave a positive mark on the exchange's performance, and ultimately on the Company's revenue in the future," Darwish said.
The total value of margin trading reached Dh337.5 million since the introduction of this mechanism, he said, adding: "We believe that Margin Trading will gain momentum with the accreditation of more brokerage firms who have already applied."
The company's net profit for the first nine months of the year ending September 30, reached Dh38.9 million, showing a 411 per cent increase compared to the corresponding period in 2011.
"We are confident that DFM is well positioned for a new beginning given the various market infrastructure enhancements implemented over the last two years. Evidently, the best indication of this is the significant improvement in trading value and witnessing DFM as the best performing regional exchange with its general index increasing 20 per cent year to date," he said.
The company's performance improved during the third quarter of 2012 with the quarterly net loss declining to Dh1.7 million compared to Dh9.3 million in the same quarter last year.
The company recorded a total revenue of Dh155.5 million at the end of the third quarter compared to Dh145.1 million during the corresponding period in 2011. The revenue comprised of Dh121 million of operating income and Dh34.5 million of investment returns.
The Company expenses reached Dh116.6 million compared to Dh137.5 million recorded during the first three quarters of 2011.
During the third quarter of 2012, the Company's revenue reached Dh36.8 million compared to Dh31.7 million, whilst expenses amounted to Dh38.5 million in the same period compared to Dh41 million in first three quarters of 2011.
It is noteworthy that the DFM trading value significantly increased by 46.6 per cent to reach Dh40.4 billion during the first nine months of this year compared to Dh27.6 billion in the corresponding period of last year.
Furthermore, the trading value at the end of the third quarter surpassed levels achieved during the entire year of 2011 by 26 per cent. Meanwhile, trading value decreased 9.9 per cent to Dh 8.1 billion in the third quarter of 2012 compared to Dh9.03 billion in the same period of 2011.
Essa Abdul Fattah Kazim, managing director and chief executive officer of Dubai Financial Market said: "DFM is currently carrying out a series of measures to prepare its systems and procedures for the introduction of "Market Making" and three other supportive mechanisms including; Securities Lending & Borrowing (SLB)", Short Selling and Liquidity Providing. Our plans also include developing relevant new business rules, obtaining regulatory approvals, and communicating with the DFM market participants to explain the new business model, to ultimately ensure the effective introduction of the new trading mechanisms."