Brokerage troubles rise, salary, job cuts begin

Team DNA

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.

 

Advertisements

Post your Valuable Comments below:

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.