Fondul Proprietatea decides winners of broker battle

The floatation of Fondul Proprietatea (Property Fund – FP), the most important event on the capital market in the last decade, has settled things at the top of the brokers’ ranking, the people behind the scenes who trade millions of euros on the Bourse every day.
KBC Securities, the leader of the brokerage market in 2010, managed to break all records coming close to a 20% market share in January, with its 386 million RON (90 million euros) in transactions brokered, followed by UniCredit CA IB Securities, 322 million RON (75 million euros) and 16.4% of the market, while none of the other brokers had any more than 6% of the market.
Fondul Proprietatea generated 550 million RON (129 million euros) in transactions in five days driving the traded volume of the Bucharest Stock Exchange to 976 million RON, the highest in the last three years.
Top brokers, however, say that the high traded volume did not come with revenues to match, because many securities firms cut fees for transactions with FP shares to attract as many clients as possible. According to ZF’s calculations, the 550 million euros in FP transactions generated about 2.7 million RON in fees, half of which went into the accounts of the Stock Exchange and of the CNVM (National Securities Commission).
“We are not making too much money. The volume is lower than expected. We had hoped it would stabilise at over 1% of the fund per day (140 million shares, instead of the 80 million shares yesterday i.e.). The main beneficiary is the BSE, which did not cut fees. We might have doubled the market share but we’re still seeing operating losses because of the competition over fees,” explained Bogdan Juravle, head of the capital markets department of KBC Securities.