Lunch is back, but online trading, Internet still eating brokers

REMISIERS might cheer at the prospect of the lunch break being brought back to Singapore Exchange (SGX), such that they have shorter working hours and can relax with clients.

Brokers might also welcome measures to boost market liquidity, such as a proposal to widen the tick size for mid-priced companies to help increase share price volatility for day traders. But longer-term trends such as the Internet and online trading are still eating away at the future revenues and profit margins of brokers and remisiers. The industry has its work cut out trying to figure out how to respond. Optimists will say that in a bull market, all this scarcely matters. Liquidity, after all, is recovering.

Many counters on SGX have moved dramatically higher in the last six months, and double-digit percentage gains can be found in stocks as varied as manufacturers, natural resources players, parts distributors, property and oil & gas names. Brokers are initiating reports on some of these companies every other day, as they hunt for the next takeover target. As overall volumes and turnover improve, it will not be a surprise to see businesses improving after a dismal few years. Then, more retail investors will be lured back to the market. Some might look back wistfully at the roaring early 1990s, where the stockbrokers of yesterday made fortunes selling stories of wealth to frenzied customers.