| Boom year for brokers as international business grows |
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| Ireland’s stockbroking firms are continuing to benefit from buoyant economic conditions, which is leading to strong growth in institutional equities, wealth management and corporate finance. Moreover, the international proportion of their business continues to grow, as evidenced by the growing number of respondents to this year’s FINANCE Stockbroking Survey. |
One way of illustrating the growth in the number of international firms, and indeed boutique Irish operations, that Irish stockbrokers deal with, is through the number of participants in the survey. Representing the institutional clients of all the Irish brokerage firms, this list has continued to grow year-on-year, and this year’s survey marks a new high, with 752 investment management professionals polled for their view on Irish stockbrokers.
Buoyant market
2006 is set to go down in history as one of the most profitable years for the Irish stockbroking sector, with all aspects of the business booming, and all firms expected to post higher profits than last year.
From an institutional equities perspective, the IPO of Aer Lingus this year, combined with the exceptionally strong performance of ISEQ Index companies, meant that demand for Irish stocks remained very strong.
According to Conor O’Kelly, chief executive of NCB, ‘As evidenced by higher volumes on the Irish exchange, institutional activity remains high and the overseas client list owning Irish equities continues to grow’.
The corporate finance side of the stockbroking firms also experienced a very strong year, with a number of high profile deals, such as Ryanair’s take-over bid for Aer Lingus, garnering business for the firms.
Ireland’s broking firms are also benefiting from entering new markets and delivering new products and services. Property deals are now a major source of revenue for Irish brokerages, with Goodbody’s CEO Roy Barrett, writing on page 13, that in 2006, ‘the firm funded a number of major property transactions, both in the Republic and Northern Ireland’.
Moreover, the firm also provided very substantial equity into other private investment vehicles, such as ISTC, a vehicle established by ex-Anglo Irish Bank director Tiarnan O’Mahony, to invest in bank capital products and other asset backed securities.
With Bank of Ireland’s assertion that there are now more than 30,000 millionaires in Ireland, the wealth management side of stockbroking continues to boom, and now threatens to become the largest function in a typical broking firm.
Merrion’s head of equities, Adrian O’Carroll, writes that, ‘the private clients and institutional equities are neck and neck as the two largest divisions’.
Challenges
However, such growth brings with it challenges. In the CEO outlooks published throughout this issue, one key challenge emerges time and time again – recruitment. As NCB chief, Conor O’Kelly writes on page 17, ‘the challenge in this business is always the same. People. Hiring, retaining and motivating talent is the key to success in this business’.
Davy’s CEO Tony Garry adds that his firm is experiencing the, ‘usual difficulties in recruiting sales and client relationship staff’, but also that, ‘we are finding that the recruitment of compliance professionals, financial accountants and IT staff is challenging’. |
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