Brokerage houses facing crisis of existence

Mahfujul Islam, Senior Correspondent,, Dhaka
Brokerage house, Photo: Collected

Brokerage house, Photo: Collected

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The brokerage houses are facing the crisis of existence due to lack of confidence on the capital market as well as liquidly crisis. Price fall in the capital market has been running on for the last six months. Due to this fall along with the investors, the brokerage houses of Dhaka and Chattogram have been similarly affected. In the current fall the big houses were affected more than the small ones.

From DSE sources it is learnt that failing to cope with the loss at least 50 brokerage houses have closed their branch offices. In the next month, more 8-10 branch offices will be shut down. The employees of these houses were terminated.

Expressing his anger an old member of DSE speaking on anonymity told that from transaction point of view my house is among the leading 100 houses listed in the stock market. I have another two offices beside Swan Tex. I am closing one office in October.

So long I stick to it that the capital market will be vibrant but now I see completely an opposite condition that it is sinking.

That member of DSE lamented that there must be a transaction of Taka 1.5 crore daily making an income of Taka 2.30 lakh daily so that I can pay my employees comfortably. But instead the daily income has now reached only Taka 60 thousand.

I have been not taking any salary from the company for the last six months. Rather I have been paying the salaries of my employees and meeting office expenditure after encashing my FDR. I am now unable to bear further losses. So I have terminated a number of officials and employees. I have even served notice to close the office.

One influential leader of DSE brokers association talked in a similar language. He told that after the collapse of 2010 we were in profit. But due to current collapse we have become beggars. The matter of profit is a far but failing to run my office.

So I have decided to close the offices of Dhanmondi and Uttara after Eid ul Azha. I would only run the Motijheel office, but client service would be lessened. Gradually I will shift my business. It has difficult to stay in this market.

From the transaction point of view EBL Securities Limited is one of the top companies. MD of the company Md. Saydur Rahman told that the transactions in the brokerage houses are vary poor in relation to necessity. So all the houses -big or small- are facing losses.

He said that, suppose we need a turnover of Taka 30 crore daily but there is only Taka 15 to 20 crore. So the house who needs a transaction of Taka one crore daily but it is getting Taka 50 lakh to 60 lakh daily. So due to liquidity crisis the broker houses are facing losses. However I hope that the problem will go soon and the capital market will be vibrant.

In the main capital market of the country there are 250 brokerage houses in DSE. About 28 lakh investors make transactions of shares. The brokerage houses are run from the commissions of that share transactions.

According to the source of DSE, if there is transactions of shares of Taka one thousand crore daily in DSE then DSE will be able to make profit. But from the beginning of the current year the transaction in DSE is revolving around Taka 3 hundred to four hundred crore. So profit is a far matter rather it is facing nervousness to meet the normal expenditure.