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Business

3 brokers suspend operations

- Christina Mendez, Conrado Diaz Jr. -
The lethargic trading activity at the Philippine Stock Exchange continues to take its toll on brokers’ operations, with three local stockbrokerage firms opting to temporarily close shop and join three foreign brokers in the inactive list.

The Makati-based FEB Stock Brokers Inc., UPCC Securities Corp. and Topwin Securities Inc. have filed for voluntary suspension of their operations with the PSE. This came on the heels of the recent approval of the exit of foreign brokers Orion-Squire Capital, OCBC Securities and Sun Hung Kai Securities since trading turned lackluster last year as political turbulence and a flagging domestic economy kept most investors at the sidelines.

Although the three gave no official reasons for their voluntary suspension, market sources said other factors could have forced the closure of these companies. Topwin, for instance, has been linked to Joy Melendrez, one of the mistresses of former President Joseph Estrada.

FEB Stock Brokers, on the other hand, will move on to merge and consolidate with BPI Securities Corp. after the latter’s parent company Bank of the Philippines Islands bought out the former’s owner Far East Bank and Trust Co.

The heads or PSE corporate nominees of the three firms are Lawrence Low-Nang for Topwin; Emilio de Quiros for FEB; and Edgardo Kalaw for UPCC.

Aside from, this some Pse member firms are streamlining or downsizing their exposure, which means laying off personnel and shutting down their provincial branches, as in the recent cases of PNB Securities and Angping and Associates Securities Inc.

The PSE, which is preparing to demutualize or transform itself into a publicly-listed entity, has 184 broker-members out of which 165 are still actively trading.

Since late last year, daily trading at the exchange has been averaging only P300 million – reportedly the seventh lowest volume worldwide. Aside from political concerns, weak macroeconomic prospects and poor corporate results, brokers also point out that the implementation of a new law disallowing brokers to deal for their own accounts, except in very specific instances, has significantly weighed down on the brokers’ business.

It has been estimated that the dealing aspect contributes about 40 percent to a broker’s revenues.

vuukle comment

BANK OF THE PHILIPPINES ISLANDS

BROKERS

EDGARDO KALAW

FAR EAST BANK AND TRUST CO

JOY MELENDREZ

LAWRENCE LOW-NANG

ORION-SQUIRE CAPITAL

PHILIPPINE STOCK EXCHANGE

PRESIDENT JOSEPH ESTRADA

SECURITIES

SECURITIES CORP

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