Ali F Zahed

CSFBdirect-eUnion (www.CSFBdirectME.com) is the new name for DLJdirect-eUnion, which only began trading in April last year. This dot-com start-up venture was first a 50:50 joint venture between DLJ direct, the giant US online stockbroker, and a consortium including Bahrain investment bank Capital Union, Web-Trade e-Ventures and the management led by president Ali Zahed.

Then came the take-over of DLJ by Credit Suisse First Boston, and the change of name. Has it made any difference?

'The negative part is the change of brand identity in less than a year,' says Mr Zahed. 'But of course Credit Suisse also has a lot of brand equity among its high net worth customers. They have a network of offices in the region (unlike DLJ), and we are now able to draw on the resources of a much bigger organisation for research.

'Credit Suisse First Boston has more than three hundred analysts world-wide after the DLJ acquisition, and is the undisputed leader in researching Tech stocks. That means we can offer our clients a better service'.

Mr Zahed also notes that Credit Suisse has great strength in its home European markets. And he expects to be able to offer online trading in European shares at some stage in the future. Credit Suisse already has this service available for its high net worth clients.

But how is this very young online stockbroker coping with the recent poor performance of financial markets? Is this not a blow to online trading in the region?

'As we started in business after the NASDAQ crash, we have never known anything else,' says Mr Zahed. 'We have still seen our business grow, and all the advantages of online trading are still there'.

Mr Zahed explains that apart from access to research online, traders also benefit from the low cost of Internet share trading. A commission of two cents per share is payable no matter what the share price, so buying highly priced shares is remarkably cheap.

In the United States the volatility of share prices and the dot-com collapse has dented online trading to some extent. But over 30% of all share trades are still executed over the Internet, down slightly from 35% at the market peak. So what is the outlook for the markets in the near future?

'All eyes are on the Fed and interest rates, which is critical with the negative wealth effect of the market on the real economy,' says Mr Zahed. 'There is a saying in the market, 'Don't fight the Fed' and I think a lot of bad news is now discounted in share prices.

Meanwhile, CFSBdirect-eUnion has a new home as well as a new name, and moved into the Dubai Internet City two weeks ago. This is an appropriate location for a Middle East dot-com. Mr Zahed likes the environment and hopes there will be business synergy with his new neighbours.

Remarkably the whole operation is run by just nine people, and clearly benefits from the immense efficiency gains of being an e-business. Perhaps that is how CFSBdirectME.com manages to keep its commissions so low.