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MENA trading sector poised for unbridled growth in 2022 and beyond

Seven Capitals is a leading international fiscal trading company operating from the UAE, India and Mauritius. Founded in 2012, the award-winning company is on record as having overseen its clients’ monthly trading volume reaching $21.6 billion in mid-2020, and is fast attaining new growth in the Middle East and North Africa (MENA), as the region increasingly steers towards new trading opportunities.

In this exclusive interview with MENews247 in Dubai, Mohammed Shaheen, CEO of Seven Capitals, summarises the regional trading sector and is upbeat about its current and future prospects. Excerpts from the interview:

The name Seven Capitals:

Seven is a lucky number in the West. In China, the number also symbolises togetherness and for the Chinese it holds a different significance: Rmb7.0 to the US dollar is an important psychological exchange rate. When it weakens past that rate, global investors tend to panic.

Quite a few factors went into choosing the name of Seven Capitals. We thought about names for weeks and went through tons of options. Finally, I came up with the name Seven Capitals, which beautifully sums up everything our company is doing; which is to help people put their money mindset right while investing their money.

Meeting clients’ needs:

Forex trading can be profitable and lucrative when it is approached as a business, but achieving a level of success is extremely difficult and can take a long time. It’s a good idea to check the pros and cons of this form of investment prior to getting started with forex. Seven Capitals is open and operates 24 hours a day and five days a week.

To make smart decisions and win trades successfully, Seven Capitals takes time to master the skill well. We test a few methods, then stick with it and test it with a range of resources and different time frames until we find one that produces a reliably positive outcome. In Forex trading, the reason many traders lose money is because of their lack of awareness and experience, which leads to disregard of money management concepts in their trading strategy.

Currency trading management is also a crucial factor that cannot be negotiated, by novice or seasoned trader. At Seven Capitals, we get the money mindset right for our customers.

Key factors that determine the business direction of Seven Capitals:

The field of foreign exchange is not the easiest to master, and every trading platform is based on solutions that require onboarding. Even if you’re confident that 90% of your clients have extensive experience, we provide activities such as educational webinars and helpful media content to our customers.

We believe in sustaining our differentiation from other brokers to ensure that each passing day we have more successful stories from our customers. Our company algorithms run on the theory of making our customers happy and satisfied with our services and we grow, together with them [customers].

The forex industry is heavily saturated with various brokers, and for the most part they offer the same thing; most brokers offer tight spreads, and a lot provide ECN [Electronic Communications Network] execution. In terms of the chosen FX business model and its features, this usually makes it harder to differentiate offering. At Seven Capitals we understand the needs of our customers and we tailor-make solutions according to their requirements.

Impact of current global events impacting the GCC market:

Foreign exchange pricing has been severely affected by the current tension between Russia and Ukraine, but this scenario has not followed the pattern typically seen in similar other crises.

Positive sentiments towards the dollar, for example, have not been as strong as in some previous crises, which might be explained partly by market complacency that central banks will not allow a new systemic crisis to develop.

Mohammed Shaheen, CEO of Seven Capitals: “In today’s competitive financial services marketing environment it is more important than ever before to understand your customers.”

Prospects for the UAE and global economic sector (2022 to 2026):

The UAE’s economic growth will accelerate in 2022 compared to 2021, growing at 4.6% in 2022 against 2.6% in 2021. The UAE will benefit from higher oil prices and a strong rebound in the non-oil sector. The UAE Central Bank has projected 5% growth for the oil sector and 3.9% growth for the non-oil sector.

It is projected that the global growth is expected to decelerate markedly, from 5.5% in 2021 to 4.1% in 2022 and 3.2% in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.

Growth in advanced economies is also expected to decline from 5% in 2021 to 3.8% in 2022 and 2.3% in 2023. In emerging and developing economies, however, growth is expected to drop from 6.3% in 2021 to 4.6% in 2022 and 4.4% in 2023.

Regional trading market assessment:

Compared to other more established regions around the globe, electronic foreign exchange trading in the Middle East is still emerging. However, new technologies and burgeoning business opportunities are quickly making the region one of the hot new areas in FX.

Regional trading markets have evolved from manual requests for quotes priced by humans to streaming requests by clients executed with minimal effort. This evolution has taken place over the last 10 years in the Middle East region, with Refinitiv being able to support clients in every step of their digitisation journey.

Much of the focus has been on making trading easy and safe, while creating products that are suitable to the nature of the region; be it Sharia-compliant accounts, regional equities, CFDs, spot or future gold and oil. There are many buy-side organisations in the Middle East that can strongly benefit from the offering and the service of institutional platforms.

MENA challenges and opportunities:

The region’s nascent forex sector has enjoyed massive growth in recent years, but obstacles – such as the current liquidity crunch – remain. While forex inflows and outflows did not account for much five years ago, today, traders across the GCC trade the same products as their counterparts in London or New York. The sector has experienced trade volume growth of more than 50% year on year, since 2011.

The Middle East’s importance is rapidly growing in the global forex market, especially with the region’s retail segment, compared to a relative slowdown and decline in other global markets. The GCC is a major corridor for global FX flows and we have seen an ever-increasing number of players in the market, as well as consistent growth in the number of people transacting in FX.

Given the strong growth of the UAE economy and the increasing number of expats coming to live and work here [UAE], we have seen FX transactional flows rising, both in and out of the country.

Target audience:

Knowing your target market is one thing. Creating an effective plan to reach those individuals or groups can be much more complicated. Understanding where the target audience spends their online and offline time is essential – whether they are retail investors, advisors and intermediaries, investment consultants or CFOs at institutions.

In today’s competitive financial services marketing environment it is more important than ever before to understand your customers. At Seven Capitals we take time and effort to analyse the behaviour and needs of our target audiences, to better understand how we can get our product offering into the hands of the right people.

In order to identify and define our target market, we look at our current customers. Who are they and why do they buy from us? We look for similarities or common interests, and which characteristics bring in the most business to our firm.

Seven Capitals head office in Dubai.

Expansion plans for the MENA region and India:

Keeping in line with my vision of educating people about forex, I have laid the foundation of the Seven Capitals Institute of Financial Studies in Kochi, Kerala, India. We have another office in Mauritius. Right now, we are placed in the heart of the UAE, Dubai, but we will soon be expanding to the MENA region in the near future.

GCC and India proposition:

The GCC has made several changes to policies that support the bloc’s continued openness to trade. These policy changes include generating unified technical standards, harmonised customs administration procedures, and reduced clearance requirements to lower non-tariff barriers within the GCC.

The UAE has diversified its economy and will continue to do so as a hub for global trade, technology, and services – particularly in the MENA region. The UAE’s investment in free zones and open economic policies has attracted businesses. These free zones include Abu Dhabi Global Markets (ADGM), Dubai International Financial Centre (DIFC), Dubai Multi-Commodities Centre (DMCC), and many more with specific industry focuses.

Saudi Arabia will be a rising force in the GCC, spearheaded by the country’s Vision 2030, which includes significant steps to diversify the Saudi economy from hydrocarbons. Saudi Arabia’s debt as a percentage of GDP remains very favourable: in 2019 the country’s debt was only 20% of the GDP, whereas countries like the US and UK have over 100% debt-to-GDP ratios.

India’s economy has a strong foothold and is host to several international business giants owing to the market size, scope for innovation and soundness of the financial market. India’s robust and stable financial system has also gradually transcended from being a highly controlled environment to a more liberalised set-up.

Seven Capitals Institute for Financial Studies overview:

As part of the Institute’s educational outreach programme we are in the process of introducing an app platform for children. We are also in the process of launching a portal that will change social interaction and current affairs communication for children. The Covid-19 pandemic has changed the digital behaviour of kids, and which has increased the consumption of social media.

Too much passive use of social media – just browsing posts – can be unhealthy and has been linked to feelings of envy, inadequacy and less satisfaction. The flip side is that social media can be a great place to learn about new things and interact with individuals who share your interests. With our new app we want the young generation to be adhered to what’s going on around the world, along with social interaction, just like any other normal social media app.

Seven Capitals operating out of Dubai:

Just like many other business sectors, forex trading is also very profitable in Dubai. Amongst many regions, Dubai stands out particularly well due to its relatively well-developed financial system and business-friendly environment.

Being one of the pertinent financial centres in the Middle East, Dubai and the other six emirates of the UAE serve as a base for many forex traders or brokers and other online trading activities. The hyper-connected emirate [Dubai] acts as a nerve centre for trillions of dollars of business and investment into the Middle East, Europe, Africa, India, Asia and beyond.

Dubai’s strategic global location, combined with business-friendly policies and future-forward infrastructure, has shaped the emirate into becoming a leading global trade, finance and e-commerce powerhouse. Dubai provides trading businesses operating in the emirate with a well-structured commercial enterprise, a safe market space, and secure investment opportunities.

Establishing a trading business in Dubai also facilitates the development of stable and open trade connections, which makes it easier to break into global markets. As a result of its advantageous geographic location, Dubai is a significant international trade hub and the headquarters of a number of regional and global corporations. The geographic position of Dubai, as well as its excellent trade and commerce connections, makes it a popular trading destination around the globe.

The geographic location of Dubai is important because it provides a solid foundation for the trade industry. The emirate’s strategic position makes it an excellent interface, as well as a key connecting hub for the twenty-first century.

GCC regulatory authorities’ role:

Governments in the GCC region know that a strong, resilient financial services sector is critical to economic development and reform. On the regulatory front there have been significant changes that demand large-scale investment in new technologies to ensure compliance.

Although these changes require considerable effort, they are helping the GCC financial sector to develop rapidly, adopt leading practices, and thereby pave the way for sustainable economic development.

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