UAE-based low-cost robo-advisory platform Sarwa, will roll out a zero-commission stock trading service within the next six months to tap demand for online trading, which has surged during the Covid-19 pandemic.
Sarwa Trade will allow retail investors to buy and sell global stocks and exchange-traded funds through the Sarwa app, co-founder and chief executive Mark Chahwan said on Wednesday.
"We made investing accessible [and] it’s time trading follows suit," Mr Chahwan said. "Many members of the [Sarwa] community are trading small amounts in companies they are passionate about, so we built this new service to allow them to do that in a safe and regulated environment."
Retail investors are increasingly seeking direct access to markets with the help of technology, leading to a surge in popularity for zero-commission trading apps such as Robinhood, eToro, Interactive Brokers and Sarwa. Demand for trading apps jumped during the pandemic due to monetary easing by the US Federal Reserve and other central banks, giving people more money to invest during pandemic lockdowns.
The recent GameStop trading frenzy, which saw the video game retailer hit a high of $483 at the end of January then plummet to below $100 a week later, led Robinhood to suspend trading in the stock. The phenomenon put the spotlight on online trading apps and raised concerns about their safety for novice investors.
A similar scenario is unlikely to happen in the UAE with Sarwa Trading, which will be regulated by Abu Dhabi Global Market and is currently in private beta mode, Mr Chahwan said.
“We've been around for three years and building our infrastructure for a long time in a very regulated, safe environment where we don't push this insane activity and all the hype,” he added.
“If you go on Robinhood, it’s super gamified and that’s not what we are doing. We are providing accessibility, simplicity and transparency and putting it into trading. Robinhood popularised the zero-commission model and we love the fee aspect and accessibility aspect of it … the gamification element, we are not sold on.
"We still believe the smartest way to build wealth is through regular, long-term, and diversified investing. That does not mean there is no place for buying and selling stocks, as long as it’s done responsibly, especially when it comes to themes you really believe in, whether it’s crypto, green energy, or innovative tech companies."
Founded in 2017, Sarwa Invest uses artificial intelligence to rate an investor’s risk tolerance and assigns them a tailored investment portfolio of exchange-traded funds, charging them lower advisory fees than traditional financial advisers and wealth managers. The FinTech platform currently has 25,000 registered users.
In January, Sarwa secured a financial technology experimental permit from Saudi Arabia's Capital Market Authority, allowing it to operate in the Arab world's biggest economy. However, Sarwa Trade will not be available to investors in the kingdom.
The FinTech platform is also about to launch a new funding round after raising $8.4 million in new financing in January 2020.
“It’s going to be in the double digits and we are targeting both regional and global investors to fuel the growth of the company and expand the team around the project,” Mr Chahwan said.
The funding round will close in the first half of the year, he added.
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
The 12 breakaway clubs
England
Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur
Italy
AC Milan, Inter Milan, Juventus
Spain
Atletico Madrid, Barcelona, Real Madrid
Tightening the screw on rogue recruiters
The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.
Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.
A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.
The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.
The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.
Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.
Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment
But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.
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Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
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Global state-owned investor ranking by size
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1.
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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8.
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Australia
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9.
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Saudi Arabia
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10.
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South Korea
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The specs: 2018 Audi RS5
Price, base: Dh359,200
Engine: 2.9L twin-turbo V6
Transmission: Eight-speed automatic
Power: 450hp at 5,700rpm
Torque: 600Nm at 1,900rpm
Fuel economy, combined: 8.7L / 100km
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UAE currency: the story behind the money in your pockets