Heard on the Street

Local brokers feel heat of foreign broking peers 

Domestic broking firms, which dealwith institutional clients, are facing the toughest times in the past 5-6 years. If the overall fall in business from foreign clients was not bad enough, competition from foreign broking houses for a share of their pie in the business from local institutions has hit them harder. 

Deprived of business from overseas clients themselves, foreign institutions are now aggressively pitching withmutual funds and insurance companies for more work. 

The domestic broking houses, especially the smaller ones who have survived on relations with these institutions, are threatened by the sophistication and prowess in research of their foreign counterparts, especially in the field of futures and options. 

Against this backdrop, it remains to be seen as to how many of the smaller local broking houses can survive this onslaught and how many would slip into hibernation, till market conditions improve. 

No rush for ‘exclusive’ info in bearish times 

Exclusive information was considered critical by every fund manager in the bull run to have an edge over his competitor. 

Till December 2007, fund managers used to insist on exclusive meetings with companies to get that piece of information, which no one else had. 

And they got what they needed, with companies slicing and serving potential developments to them. With the bear market setting in, the fight for such exclusive information has died down, as nobody wants to hear about the negative information first. 

In fact, fund managers nowadays prefer to meet companies in groups. A fund manager said, “We do not know what information the company has given to each one of us exclusively when the times were good. So now, we choose to go in groups and get a sense of the company’s prospects together.” 

Source: ET