Broking Industry

SECTOR REPORT PRIVATE CLIENT RESEARCH JUNE 22, 2010 Sarika Lohra sarika.lohra@kotak.com +91 22 6621 6313 India Brokerage Industry India has witnessed a consistently strong growth of everyplace 7%+ over the past 5 years. This, along with the conducive regulatory environment, has attracted foreign investors to India. The number of FIIs registered in India has increased to 1711 in April 2010 from 513 in 2003. Increasing foreign participation has been significantly positive(p) for with child(p) foodstuffplace intermediaries in India. FY09 remained a lackluster year, with FII be net sellers for ~US$10bn. Retail investors participation also remained down in the mouth during FY09, which impacted performance of capital market intermediaries. With Indian preservation moving on an up cycle during FY10, FIIs infused ~$20bn in Indian capital markets, and retail participation also improved by means of insurance and mutual fund route. Corporate fund airlift activity (through QIPs, IPO, and debt syndication) has also gained momentum during FY10. This has aided capital market intermediaries fee-income. The secondary capital market volumes clocked a growth of 60% yoy to Rs. 978bn (annual average) during FY10 from Rs609bn in FY09. Presently close to 77% of the capital market volumes comprise of F&O volumes as compared to 61% in FY05.

Change in the capital market volume desegregate has tempered market share of top 10 capital market intermediaries during FY10. Moreover, lower delivery volumes in the cash incision have impacted brokerage yields during FY10. We opine that the market share of most of the capital market intermediaries will remain infra pressure going forward. With increased competition, brokerage yields are expect to remain flat despite higher focus of the intermediaries on the cash segment. We have assumed a 15% CAGR over FY11-12 in capital market volumes from current average of Rs 978bn. direct cost of capital market intermediaries is largely variable in nature. Cost effective distribution model -... If you want to stomach a full essay, order it on our website: Orderessay

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