More brokers quitting over trading curbs
SINGAPORE'S shrinking brokerage industry is set to get even smaller as trading restrictions planned by regulators dent profits, according to a body that represents individual brokers.
The average daily value of shares traded, which slumped 40 per cent in the first two months of this year from a year earlier, will decline further, should rules be implemented that include requiring collateral for some trades and shortening the settlement period, said the Society of Remisiers.
Singapore Exchange and the Monetary Authority of Singapore proposed the changes after a penny-stock rout in October erased US$6.9 billion (about S$8.8 billion) in the market value of three companies over three days.
"More people will leave the industry as they will get less business," said Mr Jimmy Ho, president of the Society of Remisiers.
"Once they cut the settlement period, there will be less speculative trading and it will drag down overall volumes."
The number of stockbrokers in Singapore fell 8.4 per cent to 3,973 at the end of last year from 4,336 in 2011, according to data from the bourse. The industry was buffeted by declining trading volumes and commissions, as well as competition from online trading platforms.
"Brokerages are able to cope with fewer dealers because trading volumes are lower," Mr Ho said. "That is a natural adjustment for the industry."
It will be hard to draw young people, given the high risk and low commissions, said Ms Yeo Aiqi, 28, who left Phillip Securities, the city's biggest brokerage by clients, in 2011 after working there for three years.
"Stockbroking appears to be a sunset industry," said Ms Yeo, who now sells women's apparel at her online store www.clothingcandy.com.
Some stockbrokers have given up waiting for an industry revival.
"The risk to reward just does not work out," said Mr Chin Chung Hwa, who quit his job as senior vice-president of corporate broking at CIMB Securities Singapore in December.