Al Ramz Securities, one of the UAE's leading brokerage houses, has once again reaffirmed its pioneering role in local industry by introducing the country’s first-ever Islamic Margin Trading service.
The service is patterned after the ‘Murabaha’ type of Shariah-compliant ‘cost-plus’ financing, where a fund purchases goods and resells them to a third party at an agreed-upon price. The price includes the cost of the goods plus a profit margin, with the cost and margin predetermined by the parties involved in advance.
Under its Islamic Margin Trading scheme, Al Ramz buys Islamic-compliant shares specifically agreed upon with the client and then sells them to the latter following the Murabaha sharing concept, with the payment mode chosen in advance. The service has been approved by an advisor from the Sharia Board.
“Our new Islamic Margin Trading facility reflects our unique brand as an innovative and progressive brokerage. By adopting Sharia-compliant murabaha principles, we enable clients who are short on finances to strategically pursue their stocks of choice. This marks a first for the UAE which will definitely have a positive impact on the movement and nature of the local stock markets,” said Mohammad Al Mortada Al Dandashi, Partner and Managing Director, Al Ramz Securities.
Al Ramz Securities had recently been granted a Margin Trading permit by the UAE’s Securities and Commodities Authority (SCA), becoming one of the first local players to be authorized to provide such a service. The brokerage is licensed to trade in foreign markets and offers a comprehensive portfolio of financial services for individual and institutional clients across its branches in Abu Dhabi, Al Ain and Dubai.