Dubai-based retail brokerage company Amana introduced its stock trading services free of charge for stocks listed in the MENA region in the last month. Consequently, this price update was implemented after then Robinhood, the American brokerage that made a disruption to the market with fee-free trading. By creating this account, Amana has already released commission-free trading on US stocks, indices, commodities, gold, currencies, and cryptocurrencies.
The successful commission-free model
The growth of Robinhood has triggered a movement in the industry where major competitors among the likes of Amana (eToro – an Israeli firm, Capital.com, RoboMarkets) have to adopt a zero-fee pricing model. The target is to cut the barriers to entry for investors in the MENA region, the market participation of which is far from Western countries’ countries.
The Amana CEO underlined the fact that merely 5% percent of the region’s population take part in the stock market, while 58% in the US and 33% in the UK, respectively.
Easing the way for MENA investors
Nevertheless, the markets are relatively small, with about 1,000 companies listed in MENA and a joint capitalization of $4 trillion, and with Amana, it becomes easier for retail investors to invest. In the past, brokerage firms implemented fractional stock purchases, providing an opportunity for investors to buy partial pieces of company stocks instead of the whole lot, which may be too costly.
Amana’s CEO, Muhammad Rasoul statement
“Our initiative will provide more investors and traders across MENA access to local equity markets – in a cost-effective, fractionalized method for everyone. We believe the MENA opportunity is big, and everyone should be able to participate in that growth opportunity.”
“This move exemplifies Amana’s core values. As a locally built broker, our mission extends beyond being a part of this emerging region’s growth; it’s about ensuring that as many people as possible can share in the economic potential of this once-in-a-generation regional transformation”, Rasoul further added in the official statement.