Saturday, October 25, 2008 02:50 IST
MUMBAI: After a long time, some brokerages ratcheted up good trading volumes this week. But no broker is happy about it.
For them, this is that ominous sign, like how the flame is brightest before dying out.
It is a sign that high networth individuals and institutional clients are getting wiped out, and that they will no longer be there from next week to provide the much-needed business volumes.
The client, simply, has copped out.
Brokers who had done promoter funding or helped prop up shares of a company are the worst-hit in the meltdown.
While the broker kept buying the company’s stock in a supportive move, a point came when there was so much mark to market pressure that massive unwinding happened, bringing down shares by 50-60% in a day.
Look back and see which stocks fell to that extent.
Sub-brokers have evaporated across India in the last nine months as volumes dwindled, bringing down with them the demand for realty and increasing joblessness.
The salary and job cuts, which began as a trickle some time ago, gathered pace this week with many brokerages announcing it, including an Ahmedabad-based one on Friday.
Another well-known brokerage, whose south Indian founder-promoter was often seen on television channels giving investment advice till some time ago, has downed shutters.
On Friday, talk was that he was even forced to sell some of his flats.
Hopefully, there will not be many more of that happening.