Trading in Dubai

Actually decided to go out and meet Eurex in Dubai at the last minute a few days ago, everything seems on track, they are aiming for end of April for the hub completion.

You need to buy a seat on one of the local exchanges out there to come under their regulation even if you're only trading eurex. The gold and commodities one seems best and costs $20k but payable at a $2k yearly rate and you only need one for the whole company. You need E50K on you company books for eurex to give you membership but minimum transaction fees are waived in the first year. The eurex guys told me they had been in several meetings with the government and regulators and that the UAE government are all for it, in no way see it as gambling and on the condition you don't trade any local's money they are keen for traders to set up and it's all tax free.

To set up a company there in the DMC zone costs about $10k but trying to get office space in this zone is a bit of a nightmare. I met a couple of german traders who get the keys to an office there this week but said it's small and was the only one available as the place is so popular. The eurex and deutsche bourse group I met are planning on touring the London arcades to get them to open arms out there. I know Schneiders and Saxons are seriously considering it at the moment so fingers crossed.

I couldn't believe how liberal the place has become, there are women walking round the malls in mini skirts and thigh high boots with the locals not batting a eye. There's some great bars out there too, met up with some residents who took me around, I could definitely do a few years there. The traffic was a bit of a downside but they are building a metro so hopefully it will release the pressure a little.
 
Eurex Obtains Recognition from the Dubai Financial Services Authority (DFSA)
Approval enables direct access of new members with immediate effect


22 Mar 2007
The Dubai Financial Services Authority (DFSA) has with immediate effect granted Eurex the status of a Recognised Body within the Dubai International Financial Centre (DIFC). The DFSA is the independent, integrated regulatory authority responsible for the regulation of all financial and ancillary services conducted in or from the DIFC. Appropriately Authorised Institutions operating in the DIFC may now apply to become a full member of Eurex and thus will be able to trade all Eurex products. Currently, Eurex is developing all technical pre-requisites to connect new members from the DIFC. A communications hub, a so-called Access Point, will be launched in Q2 to facilitate connection to Eurex.

“Markets in the Middle East are a major focus of our strategy to expand into new markets. We are pleased to be able to offer our services in this fast-growing capital market”, said Michael Peters, Global Head of Sales at Eurex.

Already in November 2006, Eurex obtained a no-objection letter from the Emirates Securities & Commodities Authority, which is the regulatory body for the United Arab Emirates. This allows Eurex to provide direct access for trading firms domiciled in the United Arab Emirates.

http://www.eurexchange.com/about/press/press_507_en.html
 
Dubai Runs Out of Office Space as Economic Boom Draws Companies

By Sean Cronin

April 6 (Bloomberg) -- Dubai, the Middle East's fastest- growing city, is running out of office space, according to the commercial property broker CB Richard Ellis Group Inc.

Nicholas Maclean, managing director of the firm's business in the Mideast, said the lack of space is making it more difficult for foreign companies to profit from the sheikdom's economic boom. Some U.S. companies have agreed to occupy premises that won't be built for two years, he said.

``There's a desperate shortage,'' Maclean said in an interview. In some cases, companies are ``running their operations from other locations until the space eases up.''

The United Arab Emirates economy, the Arab world's second- biggest, grew 8.9 percent in 2006 as the country earned an average of $65 per barrel of oil, about 22 percent higher than the previous year.

David Lesar, Halliburton Co.'s chief executive officer, plans to move to Dubai to oversee the company's expansion in the Middle East and Asia. The world's second-largest oilfield-services provider is ``looking at a number of potential places to put an office,'' spokeswoman Cathy Mann said in an e-mailed statement. ``We have not yet settled on which one it will be.''

Merrill Lynch & Co., the world's biggest brokerage, and Lancashire Holdings Ltd., a Bermuda-based insurer, are also looking for office space in Dubai. Baker Hughes Inc., the third-largest oil contractor, plans to create as much as 700,000 square feet of space at the Jebel Ali Free Zone, a 25-acre site owned by the government where foreign companies benefit from government incentives and tax breaks.

Rents Jump

``There is no available space for several large-scale international office requirements we have from companies wishing to enter the Dubai market,'' said Maclean.

Commercial rent in Dubai has jumped the past two years as landlords capitalized on the lack of space. Prime office space can cost more than 400 dirhams ($109) a square foot to rent, up from 165 dirhams in May 2005, according to CB Richard Ellis.

Some office buildings are being sold to investors by the floor, said Abdullah Hageali, chief executive officer of property developer Tameer Holding. ``When it comes to leasing space, occupiers often have to deal with multiple owners,'' said Hageali, whose company is building the 107-story Princess Tower in Dubai.

Companies seeking new office space in Dubai are also paying for the fit-out costs of the premises that are being let by developers on a ``shell and core'' basis.

``If it's a new building, you can add another 300 to 500 dirhams per square foot in fit-out costs,'' said Ian Albert, director of the real estate broker Colliers International.

``The annualized cost of occupation over a three-year lease could be 363 dirhams per square foot,'' he said. ``Three years ago it was 160 dirhams per square foot.''

To contact the reporter on this story: Sean Cronin in Dubai at scronin2@bloomberg.net

Last Updated: April 6, 2007 04:19 EDT
 
The lay of the land for the London arcades opening in dubai is basically they are looking for about 30 pro futures prop traders to commit to the initial office set up costs, somewhere in the region of £450k total in return for equal equity stakes in the new company with the view that as the business expands so would your share value. Running costs, backing etc would then be handled as normal. Although only eurex have a hub out there currently, a pipe to cbot/liffe/cme would be placed out there intially at about £130k/year until the other exchanges open hubs as happened in Singapore. If any current arcade traders are genuinely interested in this PM.
 
The Schneider effort fizzled out but have had a meeting with these guys who are setting up a 35 trader floor roughly opposite the first "palm island" on the mainland. It is geared for futures prop in the same way as the London arcades work (TT etc) but will initially be looking only for self backed traders. They can help sort out residency and so on. They claim it's the only prop license issued by the government so far.

It will clear through Fimat with direct lines back to London and looks to be live next month.

Be interesting to find out how the speed is affected, I'm surprised they're bypassing the eurex hub out there but apparently the network consultants say their own lines would be equally fast

http://www.dubaiptg.com/
 
it will be slower for sure but it may not be detectably slower. basically they just want to save all the money involved with connecting to the eurex hub in dubai and buying all the required servers. so just loop everything back. thats my guess.
 
Agreed it's all about cost, they said as much themselves but they also need to be competitive when others open there who might connect to the hub, I know of another in the final stages but unsure what their decision on the hub is.

They said they'd send me the TT ping data but that can have a big range depending on how busy it is. Ultimately I'll just have to go out and do a trial run but at least it can be written down as a business expense :cool:
 
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