Thanks to the new wave of consolidation in the local brokerage system, the total number of brokerage houses in Taiwan fell by 24 to 173 over the course of the past 12 months.
But the total number of branches increased by 86 to 1,014 brokerage branches last year, according to the Taiwan Stock Exchange (TSE) -- indicating that Taiwan's securities firms have expanded their branch network despite the consolidation.
TSE said yesterday that the Taiwan had a total of 173 brokerage firms.
Taiwan saw four new securities firms including Morgan Stanley Dean Witter, Goldman Sachs, E Sun Securities (
But the consolidation may be slower as the last year's tumble in the stock market has taken a serious toll on the coffers of the brokers. "We expect the consolidation this year to be slower than last year," said Sheng Jia-chen (盛嘉珍), head of research at China Securities Co (中信證券), a brokerage arm of Koo's Group (和信集團).
Analysts believe last year's mergers in the brokerage sector have failed to achieve the expected goal of increasing their combined market share.
"The two plus two was not even four," one analyst at a domestic financial institution said, referring apparently to brokerage houses which lost market share after the merger, because of the highly saturated nature of the securities markets.
However, the recent market rally and the expansion of the turnover volume in the stock market, analysts said, will help brokerage houses expand their income.
Earnings at brokerage houses are closely tied to the turnover volume in the stock market, as most of their earnings comes in the form of commissions.
Commission hit NT$125.2 billion yesterday as the stock market climbed 60 points yesterday because institutional investors increased their holdings following the rate cut by the US Federal Reserve Board last week.
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