Trading Costs:
Trading Costs in UAE:
Since November 2005, the cost of buying or selling with brokers in UAE was set. The price is 0.275% of trade value plus 10 UAE dirhams with minimum 75 dirhams per trade (same for buying and selling). This is subject to change but there should not be big variations between brokers (Share Wadi, 2007).
The breakdown trading fees that were set by Securities and Commodities Authority (SCA) is as follows:
• Broker's commission is 0.15%, minimum 30 dirhams.
• Exchange commission is 0.05%, minimum 20 dirhams.
• CSD commission is 0.05%, minimum 10 dirhams.
• Authority commission is 0.025%, minimum 5 dirhams.
• Additional 10 dirhams fixed charge per trade (total minimum is 75 dirhams).
Buying on Margin:
Buying on margin happens when an investor opens a margin account with the broker to have access to a source of debt financing (broker’s call loans) that enables him/her to borrow part of the purchasing price of the security from a broker when necessary (Bodie, Kane, & Marcus, 2010). At that point, the securities bought by the investor serve as collateral for the loan borrowed, and because of that, the value of the loan is just as important as the amount lent. Therefore, it is essential to ensure that the market value of the securities does not fall too low; and to assure that, the broker requires a certain percentage of which the ratio of the market value to the loan does not exceed.
The legal margin requirement on all stocks now is 50%; i.e. at the investor himself should finance at least 50% of the price of the securities.
The minimum value of the actual margin given at any time that is permitted by the broker is called the maintenance margin (MM). When the actual margin drops below the main...
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...uritiesRegulationInTheUAE1.pdf
Saleem, N. (2013, September 3). Borrowing to buy leaves UAE markets volatile, maybe vulnerable. Retrieved October 27, 2013, from Reuters: http://www.reuters.com/article/2013/09/03/markets-weekahead-mideast-idUSL6N0GX0F620130903
Share Wadi. (2007, November 3). Dubai Stock Market and Abu Dhabi Stock Market . Retrieved October 30, 2013, from Share Wadi: http://www.sharewadi.com/FAQs-Dubai-Abu-Dhabi-stockmarket.php
Viswanath, P. (n.d.). Short Sales and Margin Purchases. Retrieved October 27, 2013, from Dr. P.V. Viswanath: http://webpage.pace.edu/pviswanath/notes/investments/shortsal.html#short
Zimmerhansl, R. (2012, October 4). UAE approves Securities Lending and Short Selling. Retrieved October 27, 2013, from Securities Lending Today: http://www.stocklendingtoday.com/my_weblog/2012/10/uae-approves-securities-lending-and-short-selling.html
Margin call is movie about a company that is on wall, the Lehman’s Brothers. Lehman’s Brother is a big company that has been around for more than 70 years and is big on Wall Street ,it is an investment company, what the movie shows us is the fall of this great company and the ethical/unethical decisions that was taken by the people within the company.
...ocks at a low value, and gain even more money when these securities appreciate in value.
The threat of online competitors is also present to every discount broker that has not switched to online trading or chooses to remain with their current business model and not offer online services. These online trading sites have unique trading capabilities that otherwise are not present at Edward Jones. They offer sound advice on stocks and other investments instantly. Each customer has to call their Edward Jones advisor in order to place a trade. This makes sense to Edward Jones because they want to help prevent the rash decisio...
Buying on margin is when an investor only pays 10-20 percent of their own money to purchase a stock and the other 80-90 percent is paid off in loans (Pettinger). At first, this seemed like a great idea because once the stock started to make money, paying off the loan would be easy, but it is not so easy when the stock makes little to no money. Money for these stocks was easily accessed which helped fuel the rising economy, but once the value of the stock declined investors had no way of paying off loans. (USA Today, 467) Buying on margin contributed to the collapse of the stock market because when stocks were seen to be gradually declining, investors called the brokers to request their portion of the stock in money, but the broker did not have it. This caused for many people to become bankrupt, unable to pay loans, and for consumer demand to shrivel, therefore less people were purchasing goods so less money was flowing into the economy.
The author begins the article by defining the concept of modern portfolio theory (MPT). Modern portfolio theory can be defined as a theory on how investors can have optimal portfolios that generate the heights expected return based on a given level of risk. In other words, it is possible to build efficient frontier of optimal portfolios that generate maximum expected return at a given level of risk. The article presents the optimization process in the theory by its inputs and outputs. The first inputs is the expected returns for each security, which can be estimated using historical returns. The second input is the covariance matrix that includes the correlation coefficient, the standard deviation, and the variance of each security. The last input is the constraints in the selection of portfolio such as the turnover of the portfolio or liquidity. On the other hand, the optimization process has to outputs. The first is the efficient frontiers that represent the risk-return trade-off portfolios. The second output is the choice of portfolio that has the risk and return optimization for the investor.
Volatile in the short term. Stock prices are not stable, they can be easily increased or decreased based on many factors.
There is no ageing of stock in the luxury segment as every year there is a price increase of approx. 8% on MRP, which automatically leads to increase in margin. Further, to liquidate such stocks we organize a ‘Friends & Family’ sale every year.
Howells, Peter., Bain, Keith 2000, Financial Markets and Institutions, 3rd edn, Henry King Ltd., Great Britain.
In 1979, the first islamic insurance (takaful) company was established. All muslims at that time cannot purchase the conventional insurance products as it involed interest-based transactions,uncertainty, and gambling whi...
Pricing was based on a calendar year basis running from January to December. As we can
...n the stock broker is in full control they are trust worthy enough to make the right decisions to increase your profits from your investment. By giving the broker all your information with no type of legal limits, they can do whatever they feel like. The broker can give you improper investment advice, make unsuitable decisions, commission churning, hide prices, and not diversities your portfolio. At the end all these occurrences can affect your profit to increase the stock broker’s profit. When you are dealing with investors (stock brokers) you should do a great amount of research. The research will pay off at the end because you will know the surface of the stock market and its ways. You should always get a copy of an original copy. When signing documents you should always sign in black pen. The stock market can either make or break you; it is just how you play it.
Margin Call depicts a realistic take on what happens inside a Wall Street firm. It is about a company that is downsizing their workers because of a firm’s crisis. One of the victims, Eric Dale, was working on a major analysis when he was laid off. He hands his coworker Peter Sullivan his USB, which contains the major analysis. Peter stays late and cracks the issues and calls his coworkers and bosses in about the financial disaster he had discovered. He had discovered that the company is about the crash. He tries to get ahold of Eric, no luck. He then calls his coworkers Seth Bregman and Will Emerson, who are at a bar and tells them that they need to come back to the office for an emergency situation. After showing the situation to Will, John Tuld, the Chief Executive Officer, quickly hears about it. They all have a conference meeting and decide that the company will sell all of the mortgages, which have little to no value. Once the sale is completed, the company tries to save their reputation by saying that this issue was nonpreventable.
Margin Call is a 2011 film that seeks to give viewers a deeper perspective of the financial crisis that hit the United States in 2008. The film was written and directed by J.C. Chandor. It s depiction of the happenings on Wall Street has been described as the closest to the actual happenings during the financial crisis. In this film, the main characters are faced with a moral challenge and they act according to their personal world views. Personal financial needs are put before the clients needs. The questionable manner in which the characters act put the employees on Wall Street on a cross road. It is a difficult balancing act between protecting oneself and protecting others. The decisions made by characters in this film create an opportunity for people to discuss the balancing act between self preservation and killing the dreams of the masses.
There are multiple strategies financial institutions can utilize to mitigate their risk using derivatives. Derivatives can be used to hedge losses resulting from fluctuations in...
UAE consists of seven emirates : Abu Dhabi ,Dubai , Sharjah, Ajman, Fujairah , Ras Al Khaimah and Umm Al-Quwain which is a federal state. Sheikh Zayed is one of the foundations of the Union on the second of december 1971 , where the Sheikh Zayed converts Emirates of empty desert into a green paradise . Consists state emblem is a science that combines four colors red , white , green and black . National anthem is the anthem Emirates National , which echoes in every morning in most government and private institutions . Abu Dhabi is the capital of the United Arab Emirates Abu Dhabi is one of the most world cities sophisticated in terms of modern infrastructure fit its position as a hub economic and political to the United Arab Emirates are They combine its role as a destination for business and tourist destination from shopping in shopping malls Superior to swap in traditional markets as well as enjoy the miles of sand golden beaches to break in one of the public parks in the city and dine at five-star hotel to the safari distinctive and enjoyable , and famous Emirate and the largest in terms of area is Dubai . Arabic is the official language of all the people of the United Arab Emirates . System of government is a federal system known from time immemorial . The head of state , Sheikh Khalifa bin Zayed Al Nahyan , who is also Ruler of Abu Dhabi , who succeeded his father, Sheikh Zayed , the Minister is the Minister Sheikh Mohammed bin Rashid Al Maktoum . Emirates has an area of approximately 83,600 km 2 ( 116 ) and estimate the proportion of water in which 1.1 percent , also the population of the United Arab Emirates to a 8.264 million rate of a million that have been counted in 2011 before 3 years . The population density of t...