Jul 302011
 

This is the third of three posts on the market share of stock brokers in the US, the UK and Singapore. The first part deals with US stock brokers and the second part with UK stock brokers.

Of course, the top market share is completely different to who the best stock broker is – in fact, in each case the top five includes firms I wouldn’t go near. If that’s what you’re looking for, see the guide five of the best international stock brokers.

But to discover who is number one in Singapore,  read on.

Singapore stock brokers market share

Singapore turned out to be very tricky. I thought I’d find good public statistics very quickly – you can usually find good statistics on most things in Singapore. But I was completely wrong. I could find no surveys of the market at all.

Since most of the major brokers are public companies that publish accounts, I decided to try using brokerage revenues as a proxy for more direct measures such as assets or volume. Since most Singapore brokers have similar charges, this shouldn’t be too much of a stretch. But even putting this data into the same form proved challenging.

Some groups provide broking revenues, but no breakdown for what’s being earned by the Singapore divisions and what by other divisions in Thailand or Hong Kong. Some split out all revenues by geography, but nothing by operations. So I ended up trying to estimate as best I could.

For Kim Eng, I weighted its broking revenue by the share of overall revenue earned in Singapore. In addition, the firm also states that it’s number two in Singapore by trading value, so we know where it should be in the table.

For DBS Vickers, I weighted DBS Group’s stockbroking fee income by the share of overall revenue earned in Singapore.

For OCBC, I assumed that all stockbroking fee income was due to Singapore, since I don’t think it has significant stockbroking sales elsewhere (it trades other markets, but doesn’t sign up many clients there).

For CIMB-GK, I took CIMB’s overall stockbroking income and assumed that half was due to the Singapore arm (the former GK Goh) and the other due to its brokerage in Malaysia. I think that’s probably being generous.

For UOB Kay Hian, I scratched my head a lot. The firm gives Singapore revenue, but no breakdown by operations at all. And I know it has sizable corporate finance earnings.

However, it’s the largest local firm and had 973 dealers and sales staff in 2010, according to the annual report. Meanwhile, CIMB-GK had 400 and was bulking up in the hope of capturing a 10% market share.

We’d expect UOB Kay Hian’s established workforce to generate more revenue per person than CIMB-GK’s new hires. So since it has 2.5 times as many staff as CIMB-GK, I’d estimate revenue must be at least three times as much.

For Phillip Securities, I found almost nothing. The firm is privately held and all you ever read is that it’s one of the leading brokers in Singapore – which we already know. Reuters describes it as the second-largest by number of dealers and I would assume it’s probably third by value after Kim Eng, unless its sales staff are hugely less productive than DBS.

Putting all this together, my best guess is in the table below. Apart from the fact this is obviously close to guesswork in many cases, it also includes institutional broking revenue as well as retail, unlike the UK and US data.

BrokerageSingapore broking
revenue (2010)
UOB Kay HianEst S$180-210m
Kim EngEst S$155m
Phillip Securities?
DBS VickersEst S$115m
OCBC SecuritiesEst S$86m
CIMB-GKEst S$70m

This is as much as I can do with the data out of mild curiosity … I’m not going to make this into a major research project. I haven’t tried calculating numbers for others such as DMG & Partners, Lim & Tan, AmFraser and Citibank Singapore, because they’re obviously going to run behind these firms.

The most curious point to me is how low OCBC’s broking revenue, given that it offers a strong service. This may be a weakness on the institutional side versus the other bank-owned groups.

Or it may be that it’s been difficult to win retail clients away from brokers where they already have an established relationship with their dealer. Certainly long-standing dealer relationships always seems to be a major competitive strength for Kim Eng.

Go back for US stock brokers and UK stock brokers.

Or look at a detailed review of which stock brokers in Singapore provide the best service.

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

(required)

(required)