By Charindra Chandrasena
Stockbrokers have been raking in big bucks since the reopening of the Colombo Stock Exchange (CSE) after a seven-week closure on 11 March.
In fact, earnings have been so high that stockbroking companies have already covered the revenue they lost due to the prolonged closure of the market.
“We made up our usual monthly revenue in just five or six days of trading. Things have been excellent,” a stockbroker told The Sunday Morning Business.
The CSE was closed from 20 March to 10 May and in that period, stockbroker revenues completely dried up in the absence of trading. However, since 11 May, it has been a completely different story. Stockbroker earnings are based on turnover alone, and the average daily turnover in the 14 trading days up to Thursday (28) has been around Rs. 1.5 billion. These figures are in spite of the CSE seeing its shortest trading day in history on the opening day (11), which lasted a mere 38 seconds, allowing a turnover of only Rs. 24.8 million.
This is in stark contrast to the average daily turnover of 2019, which was well under Rs. 1 billion, and is even higher than the average daily turnover in 2020 prior to the market closure.
Colombo Stockbrokers Association (CSBA) President Kosala Gamage told us on Thursday evening that the stockbroking community is on a much better footing now than they were last year.
“Compared to last year, what we have seen over the past two-and-a-half weeks has been amazing. Simply amazing,” he exulted.
Several stockbroking companies are reported to be reconsidering the salary cuts introduced in April amidst the economic doom and gloom of the Covid-19 pandemic. These were originally supposed to be in place till June, but there is now a likelihood that these cuts, which were sometimes as high as 40%, will be discontinued before June.
However, market analysts have expressed concern about the massive foreign outflow seen in the market since its reopening. There has been nearly Rs. 8 billion worth of foreign outflow from the CSE in these 14 market days, although that has had no impact on the stockbrokers. There has been high interest from domestic high-net-worth individuals and institutional investors who have been picking up fundamentally stable stocks at a bargain due to the departure of foreign investors. This interest led the S&P SL20, which includes the CSE’s 20 largest companies, to reach all-time record highs twice in the same week.
Stockbrokers have been raking in big bucks since the reopening of the Colombo Stock Exchange (CSE) after a seven-week closure on 11 March.
In fact, earnings have been so high that stockbroking companies have already covered the revenue they lost due to the prolonged closure of the market.
“We made up our usual monthly revenue in just five or six days of trading. Things have been excellent,” a stockbroker told The Sunday Morning Business.
The CSE was closed from 20 March to 10 May and in that period, stockbroker revenues completely dried up in the absence of trading. However, since 11 May, it has been a completely different story. Stockbroker earnings are based on turnover alone, and the average daily turnover in the 14 trading days up to Thursday (28) has been around Rs. 1.5 billion. These figures are in spite of the CSE seeing its shortest trading day in history on the opening day (11), which lasted a mere 38 seconds, allowing a turnover of only Rs. 24.8 million.
This is in stark contrast to the average daily turnover of 2019, which was well under Rs. 1 billion, and is even higher than the average daily turnover in 2020 prior to the market closure.
Colombo Stockbrokers Association (CSBA) President Kosala Gamage told us on Thursday evening that the stockbroking community is on a much better footing now than they were last year.
“Compared to last year, what we have seen over the past two-and-a-half weeks has been amazing. Simply amazing,” he exulted.
Several stockbroking companies are reported to be reconsidering the salary cuts introduced in April amidst the economic doom and gloom of the Covid-19 pandemic. These were originally supposed to be in place till June, but there is now a likelihood that these cuts, which were sometimes as high as 40%, will be discontinued before June.
However, market analysts have expressed concern about the massive foreign outflow seen in the market since its reopening. There has been nearly Rs. 8 billion worth of foreign outflow from the CSE in these 14 market days, although that has had no impact on the stockbrokers. There has been high interest from domestic high-net-worth individuals and institutional investors who have been picking up fundamentally stable stocks at a bargain due to the departure of foreign investors. This interest led the S&P SL20, which includes the CSE’s 20 largest companies, to reach all-time record highs twice in the same week.