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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ »  Brokers seek permission to close shop temporarily

Brokers seek permission to close shop temporarily

+4
prasadrmb
D.G.Dayaratne
bullrun
Redbulls
8 posters

Go down  Message [Page 1 of 1]

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
Several struggling stock brokers have written to the Colombo Stock Exchange (CSE) requesting permission to temporarily halt their operations mainly due to low activity levels in the bourse, Mirror Business learns.

This was confirmed by Securities and Exchange Commission (SEC) Chairman Dr. Nalaka Godahewa during an inquiry.

“There is a proposal by several brokers requesting temporary deactivation of their operations. The CSE has forwarded it to us and we are considering it. We have not discussed it with the Commission yet, but at the secretariat level, we are looking at it positively,” Dr. Godahewa said.

He further said, it was not a “bad idea” as it has happened in many other markets as well.

“You allow those who are struggling to remain deactivate for a while. It will give more opportunities for others who will continue to operate in the market,” he noted. Altogether 29 stock brokers currently operate in the CSE, and many are of the opinion that the number is too high for all to sustain their businesses.

A number of new broking licenses were issued just after the conclusion of an almost three decade war in 2009—at a time when the market was undergoing a re-rating.

In 2010 and 2011, the daily average turnover stood over a couple of billion with the arrival of new set of retail investors into the market, providing ample opportunities to brokerages to make money.

However, in 2012, with the market undergoing a painful correction, the euphoria died down and many new retail investors burnt their fingers.

The daily average turnover in 2012 plunged to Rs.883.6 million, creating a highly competitive environment for brokers to operate. The daily average turnover in 2013, according to latest CSE figures, stands even lower at Rs.828.4 million.

“I think there are far too many brokers in our market. But like the Central Bank who has told the finance companies to consolidate, we have not told brokers to do so. The industry has to decide on its own. We are not going to tell them how to do business,” Dr. Godahewa stressed.

Brokers seek permission to close shop temporarily
MONDAY, 06 JANUARY 2014 09:27 E-mail Print
Several struggling stock brokers have written to the Colombo Stock Exchange (CSE) requesting permission to temporarily halt their operations mainly due to low activity levels in the bourse, Mirror Business learns.

This was confirmed by Securities and Exchange Commission (SEC) Chairman Dr. Nalaka Godahewa during an inquiry.

“There is a proposal by several brokers requesting temporary deactivation of their operations. The CSE has forwarded it to us and we are considering it. We have not discussed it with the Commission yet, but at the secretariat level, we are looking at it positively,” Dr. Godahewa said.

He further said, it was not a “bad idea” as it has happened in many other markets as well.

“You allow those who are struggling to remain deactivate for a while. It will give more opportunities for others who will continue to operate in the market,” he noted. Altogether 29 stock brokers currently operate in the CSE, and many are of the opinion that the number is too high for all to sustain their businesses.

A number of new broking licenses were issued just after the conclusion of an almost three decade war in 2009—at a time when the market was undergoing a re-rating.

In 2010 and 2011, the daily average turnover stood over a couple of billion with the arrival of new set of retail investors into the market, providing ample opportunities to brokerages to make money.

However, in 2012, with the market undergoing a painful correction, the euphoria died down and many new retail investors burnt their fingers.

The daily average turnover in 2012 plunged to Rs.883.6 million, creating a highly competitive environment for brokers to operate. The daily average turnover in 2013, according to latest CSE figures, stands even lower at Rs.828.4 million.

“I think there are far too many brokers in our market. But like the Central Bank who has told the finance companies to consolidate, we have not told brokers to do so. The industry has to decide on its own. We are not going to tell them how to do business,” Dr. Godahewa stressed.
http://www.dailymirror.lk/mirror-stock-watch-live/41216-brokers-seek-permission-to-close-shop-temporarily-.html

bullrun

bullrun
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
It is better to keep good firms only.

D.G.Dayaratne


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Mr Godahewa is correct

Pl practice what you preach

Market forces do not permit too much of brokers and Crooks
to exists in the long-run

Pl allow market forces to  work in at least  in the stock market

prasadrmb

prasadrmb
Manager - Equity Analytics
Manager - Equity Analytics
What will happen to people who brought shares through those brokers.

Leon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@prasadrmb wrote:What will happen to people who brought shares through those brokers.

Those accounts will be transferred to some other firms. By the way what is the most sound broker in the industry? I mean financially.

yaka

yaka
Manager - Equity Analytics
Manager - Equity Analytics
@Leon wrote:
@prasadrmb wrote:What will happen to people who brought shares through those brokers.

Those accounts will be transferred to some other firms. By the way what is the most sound broker in the industry? I mean financially.

in that case who will decide which one to be transferred ?? any idea?customer or broker?

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
Hmm, this is tricky. There will be large credit also with some customers.
Also if customer get transferred Broker may never get 90% of them back.

No to mention the hassle for the customer who want to stay active.


This is why it is always better to go with a larger / reputable( long standing) broker. Never know about these smaller companies.





@Leon wrote:
@prasadrmb wrote:What will happen to people who brought shares through those brokers.

Those accounts will be transferred to some other firms. By the way what is the most sound broker in the industry? I mean financially.

Leon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@yaka wrote:
@Leon wrote:
@prasadrmb wrote:What will happen to people who brought shares through those brokers.

Those accounts will be transferred to some other firms. By the way what is the most sound broker in the industry? I mean financially.

in that case who will decide which one to be transferred ?? any idea?customer or broker?

In fact, all the assets and liabilities will be absorbed by a bigger firm.

D.G.Dayaratne


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
These broker firms who obtain license after 2009 are directly connected

with stock market manipulation for a"BORUSHOW" and personal gains

They will get the support from higher  Authorities

Giving permission to close may not be an easy task

gamaya


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
So all the credit goes on a freeze too..?

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