In June 2020 Melbourne based CFD & forex broker Pepperstone announced this week that it had secured a DFSA (Dubai Financial Services Authority) license as part of the groups Middle East expansion.
Pepperstone (read Pepperstone reviews) will operate out of Dubai through a new entity Pepperstone Financial Services (DFIC) Limited which will be headed by Tarik Chebib who is no stranger to Dubai having helped to set up IG Group’s operations there back in 2015.
Pepperstone has been planning to expand its footprint into the gulf states and the wider Middle East for some time but rather than try to service this region from offshore it decided to have a physical presence in the region the DFIC or Dubai International Financial Centre was a logical choice for the company to base itself in.
In recent years Dubai has tried to establish a western-style model of regulation and authorisation to establish a dominant financial centre for the region something that the Middle East has not had before.
The new Pepperstone business will focus on attracting HNWIs from across the region offering them Forex and CFD brokerage services. Mr. Chebib who is head of the Middle East at Pepperstone flagged the importance of contracts that allow clients to speculate on the price of oil and trade gold, two commodities that are very much in focus for traders in the Persian Gulf.
Recent research from online consultancy Cpattern suggests that Middle Eastern clients are among the most enthusiastic depositors into trading accounts with clients in Kuwait and Qatar depositing funds just over 7 times per month on average.
The local population of Dubai is relatively small, but the Emirate has a large ex-pat community and business connections that span across the region and extend into India, Africa and the far east.
Margin trading involves the charging of interest something which is not compatible with Islamic teachings so it’s likely that Pepperstone will offer modified it’s Middle Eastern clients modified trading terms and contract specifications via Islamic accounts one of a number of nuances that are important if the business is to succeed in the region.
Pepperstone’s new business will join a highly competitive environment a quick google search and a look at the DFSA register shows that many of its peers from both Europe and Australia are vying for margin trading business as are several local/regional brokerages.
Dubai and the wider region are markets in which personal relationships are more likely to secure valuable client accounts than online advertising which in this instance will be more about raising brand awareness.
It will be interesting to see if Pepperstone can replicate the success it has had in its European expansion in the Middle East the timing of the launch is not ideal however Pepperstone itself was founded in the wake of the Global Financial Crisis and subsequent recession so perhaps that timing is actually a good omen.
- Further reading: compare the best brokers for trading in the UAE
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
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