Stock broking, a new reality

Trading on SGX dived to a low of $914m daily after the recent penny stock crash. Superficially it is still a big number to generate a decent income for the brokerages and the remisiers. But what is real? My guesstimate is that 90%, could be more, of the daily trades are done by computer traders and house traders which generates zero commission. Assuming that this is true, the balance 10% or $90m, to round up the number for ease, would generate at max $450k at 0.5% or $270m at 0.3%.

Using an average of $350k, the broking houses’ share would be $210k or $10.5k per house (assuming that there are 20 houses). The average monthly intake would be less than $230k for one brokerage.

In the case of remisiers, the share of commission is $140k. Assuming there are 3000 remisiers, the daily income per remisier on the average will be $40. Multiply this by 22 days, the monthly income of an average remisier is about $1000.

The numbers are frightening and a pittance from the heydays. Is this sustainable for an industry of 20,000 people? Is this sustainable for a regionable stock exchange, a financial centre? Is this what we call a vibrant stock exchange?

Or is this the intensive ward for the critically ill? How long can this last before the patient breathes his last breath?


Anonymous said...

...the monthly income of an average remisier is about $1000."

Of course lah, they are average what, so what you expect?

Smart remisiers (or Sinkies rather if they had quit as remisiers) will make more money than that, or already built up more than enough for their retirement, and with lots of passive income some more from dividends and other investments.

In Sinkieland, smart Sinkies make lots of money, so they will never join the loser opposition. If they really want to go into politics, they will join the winner, the PAP.

So that's why it is a vicious cycle for the opposition which will never grow strong. And the opposition can never be strong with daft, average and loser Sinkies like those average remisiers.

Anonymous said...

/// In Sinkieland, smart Sinkies make lots of money, so they will never join the loser opposition. If they really want to go into politics, they will join the winner, the PAP. ///

Sure or not?
Upload your PAP membership list lah!

We only know for sure that PAP politicians are joining the rich Sinkies by awarding themselves million dollar salaries with taxpayers' money.

Veritas said...

Hi RB you may want to blog more about Thailand issue. Thaksin and sister is pro China and they are our friends. Kuan Yew is anti China and the most pro USA person in SE Asia.

The victory of Thaksin and Yingluck will be a victory of China and a very very grave setback for USA.

Today, the pro China faction in Vietnam is gaining upper hand. Cambodia Hun Sen is almost a strategic ally of China right now. Laos is quite pro China.

Myanmar is fence sitting, a cunning and not reliable friend of China, something like North Korea. Philippines is anti China.

Malaysia is pro USA, so is Indonesia. The most pro USA country in SE Asia, is-- Singapore, sadly.

I hope Thaksin all the best. The Singaporean Chinese need to be inform about Thailand issue. Once Thailand is stabilized into the camp of China, there goes USA influence in Cochin Chinois.

PAP pro USA stance has been good to us in the early day. For the past 2 decades, it is a disaster. I am getting increasingly convinced that we need to kick out USA and join the pro China camp. Just 10 years ago, I am still quite pro USA.

I have seen PAP damaging the interest of Singaporean Chinese over the past 10 years especially and I believe USA must have a hand behind it.

Anonymous said...

Silly sinkies are being robbed and sodomised without knowing and still gloating so shiok.

Chua Chin Leng aka redbean said...

Hi Veritas, the most important agenda for Sinkies is pro Sinkies. In geopolitics the winds of change are always blowing and small countries would just take sides or take shelter for their own good.

Thailand is like Singapore, waiting for the big tree to fall and great changes will take place. It may become a republic. Providence will do what it wants to do and the political map of the region will change accordingly.

Veritas said...

All SE Asian states are tributary of China. This is the natural east asian order that lasted thousands of years. China has a natural interest in SE Asia and never mind people like Kuan Yew, East Asia will return to its normal order, not because of China's imperialism but because the of Geo political situation of SE Asia region.

Even the Bumi-putera minded Mahathir is more pro China than Kuan Yew. Mahathir is quite anti Chinese internally. I do not know what is the deal behind but certainly there are some reasons behind itt

I am pro Singapore, first of all. I am not pro PRC FT.

But for external affairs, I am seeing that USA is undesirable. When I studied the policy intiative of Thaksin and Yingluck, I started to realize why the gravitates towards China. Because China have been giving them a lot of carrot.

Anonymous said...

With technology and the internet, the days of the remisier as the gatekeeper to the HP terminal is long gone. The TAM (volume multiply by commissions) is but a fraction of the past. Maybe only 10% left, mostly old timers who need teletext.

Remaining remisiers are like a frog in heating water. Smart ones jumped far, far away like driving taxis etc. Those that jumped short ie become a trader risk getting burnt in the fire because only 10% of traders make money.

The stock market will survive just that the money is made in different areas. The algos are making money. Hence the program trades. Those that have the skills and knowledge to analyse and program are the winners now.

Chua Chin Leng aka redbean said...

Hi Veritas, Mahathir and his likes hate the local Chinese population. They would rather get rid of all of them if they could. They could only see one side of the equation. The could not make use of the industry of the Chinese to build a bigger cake for all.

International relations, other than the short span of revolutionary era when Communism was competing with capitalism, China has not done any harm to any Southeast Asian states. On the other hand the Americans were twisting the arms of these states, particularly the Muslim states. Malaysia and Indonesia had a hard time under the Empire.

Chua Chin Leng aka redbean said...

Hi Anon 10:49, you are partially right. The days of remisers are over. The day they are buried would also be the day the SGX turns turtle.

Technology cannot replace the remisiers. The technology is being introduced to cheat the innocent investors. Once all the investors are cleaned up by the computer traders, the market will go kaput. The computer traders need someone to feed them. When there is no one left, there is no justification for their existence.

And they will be a lame stock market, if it is still a stock market to talk about.

Mark my word, the stock market industry will be destroyed very soon.

Anonymous said...

Last of the Mohicans!:
December 3, 2013 at 5:35 am (Quote)

The usual grievance is we can’t get labourers, cleaners etc. Raise the salary and I bet you there are Singaporeans who will take the job! Just take a look at how bus drivers, cleaners, etc are paid in Australia and N. Zealand and you will find that there are no shortages!. A bus driver earns A$3,500 per month, waiters are paid A$18 -A$22 per hour. Those on monthly wages are paid fortnightly so as to relieve them of any needs in between.
Surprise to note that Macdonald pays about S$5 per hour!
Rating: +36 (from 38 votes)

Veritas said...

Hi RB let me compare the deeds of China to that of USA recently. When Yingluck buy rice from farmer at a higher price to help poor farmers, she was scorned and mocked by everyone in the west.

What Yingluck did was breaking rank and attacking the western system of "free market capitalism". When Yingluck run out of monies, China PM Li Keqiang came to Thailand and offer to buy up all rice Thailand can offer giving Thailand in exchange for a shinny high speed rail, that not even USA has.

The Thai intellect and elites are not stupid. They know China is helping them. Only people not happy are those pro USA faction.

In SG, USA ask all her ally to throw monies to F-35, selling us a "low" capability plan. (The high is F-22).

In the late 1980s, when Japan was catching up with USA, USA initiated a Japan bashing ended in plaza accord that hurts Japan until today.

Veritas said...

Mahathir and Malay here forget about the cordial relationship between China and Malacca sultanate. What destroy the Malacca Sultanate is white man portuguese and that time, Malacca Sultanate requested help from China.

People may think ridiculous that how "backward" China is able to project her navy and help Malacca Sultanate against "advance" portuguese.

Just 80 years ago, MUSLIM admiral Zheng He of China, commanded navies more 10x greater than Portuguese invading forces, and far more advance in technology, reaches Africa.

100 years later in 17th century, "the west has supposingly catch up and China more backwards". A Chinese admiral Koxinga defeated the Dutch who occupied Taiwan. At around the same time, the Manchus and Han army defeated Russia in Manchuria.

The Malay now forget all these. Also they think that they themselves are Islam and Chinese are not. There are many works by scholars that states that the Islamization of Malay in Malacca sultanate was much helped because Admiral Zheng He and many of his senior officers are Chinese Muslim.

Malay forgotten all these.

Veritas said...

I will stop the China subject here as it is out of topic.

Anonymous said...

December 3, 2013 at 6:19 am (Quote)

Let me work out the simple Maths for those who struggle to understand why we have such a huge income gap and an unquenchable thirst for foreigner workers in Singapore.

If a company with 1 CEO, 1 office worker and one cleaner (for the sake of simple illustration) will spend $100,000 a month on rent and salaries and rent takes up $50,000 a month, it leaves $50,000 for salaries. If the CEO pays the office worker $3000 and the cleaner $2000, the CEO will earn a salary of $45,000 a month. If the CEO wants more, he/she can reduce the office worker’s salary to $1000 and the cleaner to $800. That gives the CEO $48,200. If the CEO employs foreigners who are willing to work for half that sum, his/her monthly salary will shoot up to $49,100!

It is due to a greedy regime that refuses to put policies in place to prevent the rich and powerful from shortchanging Singaporean workers. Many times, the regime is also the same group of rich and powerful.

1. There are no or weak policies to protect workers / employees in Singapore.

2. There is no minimum wage for workers so directors can make as much money on as low wage cost as they so wish (ever heard of Singaporean workers who don’t even earn enough to meet transport and food costs and would be better off not working? I have! If they don’t want to work, there are always foreigners waiting at the side to take over the job for less pay).

3. There is no rule to prevent MPs and Ministers from holding multiple (income earning) directorships, chairmanship etc leading to them working harder for companies than for citizens because the more privileges they give to these companies, the more their own income grow.

4. There is no need for MPs or Ministers to declare conflicts of interests and their interests in companies (as shareholders, non-executive director blah, blah, blah) when conducting public work and drawing up public policies. These end up with a “you scratch my back I scratch yours” scenarios that again end up benefiting the rich and powerful and growing their wealth even more at the expense of citizens.

These are my simplistic views to my lay person understanding of economy and politics unless the regime can “educate” me otherwise.
Rating: +29 (fr

Anonymous said...

There is a big fallacy in what you are saying. Do not confuse with the low level workers. Those are not an issue and should not be used to distract what is at stake.

It is the top jobs and high paying jobs that are robbed from the PMEs by many deceptive ploys. In many instances there is no need for a foreigner.

This is the main issue.

Anonymous said...

Daft sinkies voted for the rulers
the stupid sinkies blame the rulers
Only matilah singapura is right
Matilah singaporean.

Anonymous said...

Will the newer citizens replaced the new citizens, then the new citizen sbecome property agents, insurance agents, cab drivers, cleaners, gardeners, securities later or emigrate to better pastures etc?

Anonymous said...

Aiyah... be a master hawker lah

Can appear on msm n be rich n famous.

Anybody tried the frequently overcooked wanton noodles from fook hai centre?

remisiers? .... misery sound better

Knnccb... dun worry be happy

Anonymous said...


Lust for Love said...

I don't think SGX is much bothered about this as it tries to diversify its earnings to derivatives, ETFs and other products. Shares trading probably only make up about 40% of their earnings.

To me, the local stock market is dying, with companies that are of decent size or feel they deserve better, seeking to delist one by one. To make things worse, you don't have much good companies seeking listing here. Even the KL stockmarket is better than us with some sizeable IPOs.

The way it goes, this is dying a slow death. Maybe only 1% of the people are making with the rest 'eating grass'.

Anonymous said...

Derivatives and ETF still need a stock market and investors to trade. Without them there is no market.

And with their astronomical pay, they cannot afford to have a dud market.

Also, the computer traders will disappear once there is no money to be made. No one will pay to go to a fish pond without fish.

Anonymous said...

Astronomical pay does not necessarily guarantee that we do not have a dud CEO. At the beginning of this year, SGX's CEO guided that there will be at least 20 to 40 IPO's of at least S$500m market cap. We're now near the close of the year and the count is 7 IPO's of at least S$500m. That's a sure dud. If SGX were to be an ordinary listed co, it would have been hauled up for giving false guidance!

Anonymous said...

Sure dud alright. But no one dares to say so. And they even paid him big bonuses. Real stupidity. Laughing stock.

b said...

'Hong Kong Confirms First Human H7N9 Bird-Flu Case'

- Beware of hkees.

Anonymous said...

They only think of getting new citizen to vote for them, didn't think of the negative consequences, so that they can get their fat salaries again, what more people need more jobs over crowding facilities did they serve with their heart?