Margin trade crack down prompts Shariah push

dubai stocks set for correctionBrokerages in the United Arab Emirates, where the market regulator last month vowed it may create new rules to control so-called margin trading, are increasingly offering Shariah-compliant versions of the service.

The practice contributed to stock market volatility in the country this year that sent Dubai’s benchmark index from a bull market into a bear and back again in less than a month. The U.A.E. said it may amend the rules governing lending against shares after reviewing the price swings. Increased monitoring by the central bank and Securities & Commodities Authority is creating more clarity for investors and is fueling client demand, Abu Dhabi-based Fathi Ben Grira, chief executive officer of Mena Corp., said by phone Aug. 17.

Islamic margin trading allows investors, predominantly high-net-worth individuals, to borrow cash according to terms that adhere to the religion’s ban on interest, in order to trade shares, Grira said. This is accomplished by giving interest-free loans and through Murabaha contracts, in which goods are bought and later resold at a pre-agreed mark-up, Sherif Zohdy, head of brokerage at Al Safwa Financial Services, said by phone from Sharjah Aug. 17.

ADVERTISEMENT

Notice an issue?

Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.


ADVERTISEMENT
Just in:
DNA‑Crafted Nanomachines Self‑Assemble in Water // OPEC+ Champions Insist Surge in Output Meets Market Demand // MCP Ignites AI Agent Revolution Amid Looming Security Quagmire // UAE Tightens Entry Rules for Nigerian Travellers // Behomes Launches Behomes Hub – Cashback & Networking App for Real Estate Professionals // TÜV SÜD Appoints Interim Leadership Following CEO Transition // BRICS Pledge Cooperation, Not Confrontation With U.S. // Motorbike Theft Kingpin Apprehended in Accra // Uweb, the Digital Asset Education Institute, Announces Successful Completion of a US$3 million Angel Funding Round // Galaxy AI Elevates On‑Device Intelligence with Privacy at Core // Dong Yuhui’s Fujian Journey: The Sea’s Lesson – 30% Destiny, 70% Determination // Can India Emerge As The Trusted Leader Of Global South Like Earlier Years? // MENA Investment Banking Fees Slip Amid Equity Underwriting Lull // Entrepreneurs Turn to Harsh AI ‘Red Teamers’ to Stress‑Test Ideas // Tokyo Real Estate Set for $75 Million Blockchain Shake‑Up // Caltex Commemorates SG60 with Launch of Limited Edition National Day Picnic Sets // IIT Delhi and TeamLease EdTech Kick‑start AI for Healthcare Executive Programme // Meta pixel ruling marks watershed in EU data privacy // Qingzhen’s Zhanjie Town Leverages Ecological Resources to Drive Industrial Upgrading and Integrate Culture and Tourism for Rural Revitalization // Celebratory 911 Club Coupe Marks Half-Century Porsche Partnership //