DFM and SCA hold awareness seminar for brokers and financial analysts

The seminar, titled "Tools for Financial Analysis," was held under the sponsorship of Her Highness Sheikha Lubna al Qasimi, UAE Minister of Economy and Chairperson of Emirates Securities and Commodities Authority (ESCA).

More than 120 representatives of brokerage firms and financial analysts participated in the seminar.

The seminar comes in line with SCA's plans to host 34 seminars in 2007 to spread awareness among investors and enhance the knowledge of analysts and university students.

Hassan Al Sirkal, Operations Manger, DFM, said: "We are delighted to organise this seminar that is aimed at enhancing the skills of brokers and financials analysts. The seminar is part of a comprehensive awareness programme set to be implemented by the market in collaboration with SCA. Those seminars will tackle various topics pertaining to financial markets, such as analysis of financial results, as well as the basis of fundamental and technical analysis."

The seminar was presented by Dr. Monzer Barakat, a former professor at the University of Houston-Clear Lake, who advises the authority on matters of research and analysis.

Barakat spoke about the determinants of financial performance of companies. He pointed out that the external environment - such as the financial system, financial sector, mechanics of moving resources, and economic forces - together affect the financial performance of companies. He noted that the internal environment of a company - its forecasted cash flows and growth rates - also play a key role in determining the strength of a company's financial performance.

Barakat highlighted the impact of interest rates and money supply on the performance and value of companies. In addition, he pointed out the effect of technological changes due to new technological advances, as well as the legal and regulatory changes, demographic changes, political environment, and economic indicators. He stressed that five forces impact a company's ability to compete, grow and add value in a give market, noting that these forces are: rivalry, entry, substitutes, suppliers and customers.

Barakat spoke about the importance of analysing a company as a whole and by department, especially the finance department, to evaluate its performance and prepare financial information for financial analysis. He concluded that the analysis should also take in account the human resources, knowledge and learning resources, physical resources, general organisational resources, and most importantly, financial resources of companies.