By Nkiruka Nnorom
On a weekly and monthly basis, the Nigerian Stock Exchange, NSE, releases the Broker Performance Report, which indicates the top 10 stockbroking firms based on their contribution to the value and volume traded during the specified period. Over the years particular stockbroking firms, especially Stanbic IBTC Stockbrokers Limited, Cordros Securities Limited, Chapel Hill Denham Securities, Rencap Securities Limited and CSL Stockbrokers among others have dominated the space, accounting for over 70 per cent of both volume and value traded respectively.
In this interview with Financial Vanguard, Mrs. Titi Ogungbesan, CEO, Stanbic IBTC Stockbrokers Limited, gave an insight into the driving factors behind their performance. Excerpts:
TRADING statistics from the NSE shows that particular stockbroking firms consistently occupy the top 10 position, accounting for over 70 per cent of both volume and value traded in the market, what do you think is the reason for this.
Most of the brokers in the top 10 trade for international clients. This group of clients account for about 60-65 per cent of daily turnover which explains the reason these particular firms consistently occupy top 10 position. Investors/clients will typically do more business with the brokerage firms that can help them execute their orders timely and at the best possible price.
It is also important to know that the preference of the end clients matters. The top 10 firms have established a track record of service and understanding of the needs of the top clients that drive the value of the market.
Is there any other thing the brokerage firms involved are doing differently to warrant patronage from investors.
Most of them have expertise in dealing with international clients transactions and also have wide local institutional client coverage. Quality research, timely information dissemination, efficient and effective execution of transactions, level of corporate access e.t.c are also very important consideration for dealing with firms.
Does this trend not support the call for further merger acquisitions in the industry (stockbroking community) especially now that some dealing members have not met the recapitalisation and Minimum Operating Standard set by the SEC.
Yes, mergers and acquisitions will help bring economies of scale resulting from synergy which will strengthen the firms and improve the confidence level from investors. We saw this happen a few years back when the Central Bank of Nigeria, CBN, called for the recapitalization of banks in the country and it was positive for the sector and economy as a whole.
SEC has severally pushed the deadline for recapitalision of capital market operators forward probably to allow more firms comply. If after two years or more these firms have not complied, do you think the recent deadline extension will change anything.
Yes, it may. If the market condition improves, then stockbrokers may be able to meet the requirements. I believe SEC will continue to do what is best to protect the quality and integrity of the market.
The post M&A in stockbroking industry will bring economies of scale – Ogungbesan appeared first on Vanguard News.
Vía Vanguard News http://ift.tt/2lFKwkD
No comments:
Post a Comment