Davy leads field in share dealing earnings but brokers' commission payments drop
DAVY stockbrokers increased its share of the total commissions paid by the Irish Association of Investment Managers for dealing in Irish and international shares last year.
Goodbody stockbrokers increased its share of commissions paid by the fund managers for buying and selling international equities, according to the ninth annual IAIM survey, released yesterday.
However, the £5.9 million commission paid out by IAIM members in 1995, for buying and selling equities, was well down on the £7 million paid in 1994. So, despite increases in their market shares, the brokers' share dealing income from the IAIM was only marginally higher.
Davy got £1.83 million of the £5.9 million paid by IAIM members as commission for buying and selling Irish and international equities. This was up from £1.82 million in 1994. Goodbody's 1995 payment of £1.65 million compared with £1.61 million in 1994.
Because of its exit from the international equity market after it was taken over by Ulster Bank, NCB's earned only £1.36 million from the IAIM for equity dealing compared with £2.03 million in 1994. Riada's earnings fell to £0.76 million from £0.98 million.
Based on data provided by 17 members of the IAIM who manage assets of over £32 billion, including pension funds, the survey showed a 19 per cent fall in the total amount of commission paid in 1995 for dealing in shares.
The latest survey shows that IAIM members bought and sold £16 billion of Irish Government bonds in 1995. Based on this turnover figure, Davy carried out the largest share of the IAIM bond dealings, accounting for 28 per cent of total turnover. It was followed by Goodbody and NCB which each accounted for 22 per cent of the 1995 turnover.
Riada had a 17 per cent share, MMI had 7 per cent and Bloxham a 3 per cent stake.
IAIM bond market figures for 1995 are not directly comparable with survey results for 1994. The 1995 figures are based on total bond turnover - purchases and sales - by IAIM members. But the 1994 market share figures are based on commissions paid by IAIM members to brokers for executing bond deals.
In 1994 Davy got 32 per cent of the commission paid by IAIM for bond deals. It was followed by NCB with 21 per cent and Goodbody and Riada with 16 per cent each.
In 1995 turnover was calculated, rather than commissions aid, because of changes in the bond market towards a mixture of net price and agency broker dealing and the introduction of formal market making at the end of the year.
IAIM plans to produce turnover figures in July to show the market share of the six market makers for the first six months of the year.
Dealings by IAIM members in Irish and international equities generated commissions of £5.9 million for brokers in 1995 down from £7 million in 1994 and £6.8 million in 1993.
Of the £5.5 million paid in commissions for dealings in Irish equities, Davy took a 34 per cent share, up from 30 per cent in 1994. It was followed by NCB whose share was unchanged at 24 per cent. Goodbody's share increased to 23 per cent from 21 per cent while Riada's share slipped to 14 per cent from 16 per cent.
The stake of the smaller brokers operating in this market fell to 5 per cent from 9 per cent.
Goodbody took an 80 per cent share of the £0.49 million in commissions paid for dealings in international equities. The increase in its stake from 33 per cent in 1994 reflected the exit of NCB from that market after it was taken over by Ulster Bank.
NCB had 62 per cent of the market in 1994 but accounted for only 13 per cent in 1995.
When commissions paid by IAIM members on Irish and international equity dealings area taken together, Davy's share increased to 31 per cent from 26 per cent. Goodbody's shares rose from 23 per cent to 28 per cent while NCB's share slipped to 23 per cent from 29 per cent, mainly reflecting its exit from the international equities market.