Brokerage
2019 Highlights
- Continued to expand market share both in Bahrain and the UAE
- SICO Financial Brokerage Achieved highest revenue since inception
Overview
SICO Securities Brokerage has been ranked as the number one broker on the Bahrain Bourse for 21 consecutive years and has established reputational excellence across the region as a one-stop-shop for equities and fixed income with an experienced team of dedicated brokers backed by superior in-house research capabilities.
Since 2012, SICO has operated a second brokerage arm and its first regional presence, based in Abu Dhabi, through its wholly owned subsidiary SICO Financial Brokerage, offering equities brokerage services with access to multiple UAE markets including the Dubai Financial Market, Abu Dhabi Stock Exchange, and NASDAQ Dubai.
The Brokerage Division offers a range of investment products including direct securities, such as equities, bonds, and sukuks, as well as single-product brokerage across the GCC and the wider MENA region, margin trading facilities for equities, and repurchase agreements (repos) for fixed income. SICO’s Fixed Income Trading Desk, active since 2011, has also established itself as a market leader in the industry.
2019 Operational Review
2019 proved to be a challenging year for Brokerage due to a global climate of uncertainty and geopolitical challenges. Nonetheless, SICO Brokerage maintained its first place standing on the Bahrain Bourse and increased its market share of the traded value to 41.25% up from 39.06% in 2018.
The team traded a total of 915,828,139 shares through 16,828 transactions, amounting to 40.62% of total market executions on the Bahrain Bourse.
SICO remained the broker of choice for institutional clients, who make up 70% of its client base as well as ultrahigh net-worth individuals who rely on SICO’s unparalleled capabilities in the equities and fixed income spaces.
New achievements in 2019 included an expansion of SICO’s online trading platform, SICO LIVE, which offers clients seamless multi-market access across key stock markets in the GCC and Egypt, which was added in 2019, from a single account, granting them the ability to trade in real time and access SICO’s world-class research products from any device, no matter where they are.
The online trading platform is working to expand its scope beyond regional markets to include international markets in North America and Europe. This expanded access is expected to grow SICO’s retail client base even further as the market becomes more aware of the superior capabilities of SICO LIVE and the ease with which they can now trade international markets and have access to quality research.
SICO Performance on Bahrain Bourse (2019)
| Amount | Market Share | Ranking | |
|---|---|---|---|
| Total value of shares traded | BD 236,271,921 | 41.25% | 1 |
| Total volume of shares traded | 915,828,139 | 39.57% | 1 |
| Total number of transactions | 16,828 | 40.62% | 1 |
SICO Financial Brokerage
SICO Financial Brokerage (SFB), SICO’s Abu Dhabi based subsidiary, offers equity trading for retail and institutional clients on the Dubai Financial Market (DFM), Abu Dhabi Stock Exchange (ADX), and Nasdaq Dubai in addition to derivatives trading on Nasdaq Dubai.
In 2019, SFB significantly improved its ranking and market share on the DFM moving up seven notches to number 10 up from number 17 in 2018 with total traded value outpacing the markets by over 15%.
Commission revenue increased to AED 4.4 million in 2019, compared to AED 3.1 million in 2018, a 36% improvement year on year. Interest revenue from margin activity and deposits also increased to AED 1.32 million in 2019, compared to AED 1.08 million in 2018, an increase of 23%. All in all, total revenue for the year was the highest ever achieved by SFB since inception. SFB also witnessed an increase in retail margin activity and steady growth in institutional business.
Fixed Income
In 2019, Fixed Income trading volumes reached USD 1.32 billion, compared to the USD 1.27 billion recorded in 2018, a 4% increase y-o-y.
In a further effort to cater to the needs of retail clients wishing to raise short-term capital to finance the purchase of securities and other investments, the Brokerage Division introduced repos (repurchase agreements) for retail clients. The total repo book for institutional clients grew from USD 42 million to USD 137 million, representing an increase of over 44% y-o-y.
In spite of these challenges, SICO continued to leverage its capabilities, track record of success, and highly experienced team of professionals in order to cement its position as a leading broker in the fixed income space.
2020 Outlook
Going into 2020, Securities Brokerage will continue to face challenging market conditions, but with a solid track record, expanding market share in Bahrain and the UAE, and more streamlined client-facing services such as the expansion and upgrade of online trading capabilities, the Division remains in a strong position to withstand market headwinds.
The Brokerage team will also leverage its capabilities in order to develop tailored advisory services for its clients targeted to meet their investment and trading needs both locally and regionally.