The brokerage market is not able to recover although it’s been almost five years since the stock exchange collapse of 2008 and the main listed shares have recouped some of the losses in the past few years.
The turnover declines were determined by several factors: the absence of small (retail) investors from the stock exchange, the low level of stock exchange transactions due in part to the absence of new listings in the past few years and the significant decline of trading fees as brokers fought for the few clients left on the market. Last year 25 brokerages reported overall turnovers of RON46.5 million (EUR10.4 million), down 20% on the preceding year.
In 2007 two brokerages alone (IFB Finwest and Broker Cluj) had total turnover of RON49 million and the overall market amounted to over RON300 million.
So in 2012 the brokerage market was around five times smaller than in 2007, i.e. around RON60 million (the figure also includes the revenues obtained on the bourse by BCR, BRD, which do direct trading and by ING and UniCredit, which exited the market).
During the same interval the average daily value of transactions involving stock exchange shares fell only two-fold, from RON55 million to RON 30 million. Out of the 73 brokerages (and banks) that operated on the market in 2007, there are around 46 left. But even the brokers still left on the market have a hard time coping, with their revenues continuing to decline.
“The revenues of brokerages operating on BVB [the Bucharest bourse] fell as a result of the decline in the traded value, something that started when the crisis did, as most investors either withdrew from the market or remained stuck in companies at very high prices,” explained the representatives of Tradeville, the largest retail brokerage on the market in terms of its 2012 turnover.
Many brokers complain they don’t have all the instruments that should be available to a modern capital market, such as margin transactions.
Not least, brokers demand the stock exchange and the supervisory authorities to lower fees, saying the Romanian bourse is one of the region’s most expensive.
(English version by Daniela Stoican)