Mega Securities Co (兆豐證券), the brokerage arm of state-run Mega Financial Holding Co (兆豐金控), hopes to boost its market share by double digits this year as it struggles to gain prominence in the bank-focused financial services provider, top executives said yesterday.
Mega Securities, whose brokerage business accounted for 3.25 percent of the local market last year, aims to increase that figure to 3.8 percent this year, suggesting a growth of 17 percent, said Cheng Fu-hsiung (鄭富雄), managing director of the brokerage services division.
“All we need is to expand our customer base in spite of the market slowing,” Cheng said.
The quickest way to meet the goal is by acquiring smaller peers that are under pressure to exit, as the growing presence of foreign institutional investors has dampened demand for brokerage services, said Charles Yang (楊金源), head of the brokerage division.
Foreign institutional investors accounted for 23 percent of total transactions last year, up from 21.8 percent in 2011, while daily turnover dropped from NT$126.4 billion (US$4.34 billion) to NT$95.7 billion, Taiwan Stock Exchange data showed.
A smaller pool, coupled with a larger array of wealth management products, means a tougher operating environment for securities brokers, Yang said.
Mega Securities could also expand by enticing customers from rival firms, he said, adding that acquisitions entail a heavy pension overhang while the synergy benefits are limited.
Mega Securities posted NT$77 million in net income last year, compared with losses of NT$370 million a year earlier, company data showed.
Mega Securities chairman Chien Hung-wen (簡鴻文) said he was confident that the company could achieve a double-digit increase in revenue this year, from NT$127 million last year, on the back of an improving global economy.
“Though overshadowed by Mega International Commercial Bank (兆豐國際商銀), the brokerage will endeavor to increase its visibility in the group,” Chien said.