Stockbrokers must seek new revenue models - or face tough slog ahead

THERE was a sort of a sense of deja vu when DBS Vickers, one of the bigger stockbroking houses here, announced last month that it was restructuring its operations. Not least because this is a business that has been through regular cycles of restructurings, downsizings, mergers and acquisitions every decade or so.

Some two decades ago, the Singapore equity market was flush with liquidity, enjoying strong investor interest and attracting a slew of initial public offerings (mostly from China though). Indeed the "Wild Wild East" decade - from the mid-1990s to mid-2000s (punctuated only by the 1997 Asian financial crisis) - was a period of plenty, with stocks fuelled by frenzied speculation that surrounded newsflows (or rather rumour-flows). The 4,000 or so stockbrokers made good commission incomes in the tens of thousands of dollars every month. Alas, those days are gone.

Deregulation, cuts in commissions, the advent of online trading, and a slew of scandals involving listed companies, has sapped investor confidence - and with it, dried up liquidity. What followed were a series of consolidations which saw many of the smaller independent players being swallowed up by the bigger boys, many of which were bank-backed.