Northern brokers chop charges for futures

Press, 24 September 1988, Page 38

Northern brokers chop charges for futures

Brokerage free services are being offered by some Wellington-based futures brokers, the “Dominion” reports. However, the services are being attacked by some sectors as unprofessional. Recent low volume on the New Zealand Futures Exchange has seen brokerage rates, especially for large investors, tumble this year. Some futures brokers have gone a step further and wiped brokerage. A dealer for the DFC, Mr Toby Stevenson, told the “Dominion” he knew of at least three brokers in Wellington who were processing futures orders for free. “I think it is a shortsighted and stupid practice,” he said. “A person getting a zero-fee must assume he is getting a zero-service.” “They must also assume that their futures broker is going to get in a fee somewhere else because

there is no such thing as a free lunch,” Mr Stevenson said.

Brokers offering the free service seemed to be trying to boost a dying market. “But I think it’s a disas"lt inevitably means the ter for the industry. It’s a destructive practice.” regard a company has for its futures desk is low and therefore the quality of research and the attitude of staff allocation is low.”

Mr Stevenson said such practices were widely seen as unprofessional overseas and could harm the New Zealand futures industry. A contrary argument put by other futures brokers was that brokerage fees had fallen so much this year that it made no difference whether fees were charged or not. Despite worries about the implications of free futures broking there appears to be little that can be done about it, because of the competition clauses of the Commerce Act.

Futures dealers have not been trimming fees to fight competition in

Chrictchnrrh as thara is Dec 8621 623/620 622 83 cnristcnurcn, as there is Mar 8640 640/640 640 io now only one futures Jun 86 50 650/633 648 12 dealer here, Egden and Contracts traded: 188. Wignail Futures. Open positions at September Details of vesterdav’s 22: Oct 625, Nov 32, Dec 643, . xesieraays Jun 26 s 7 total trading were: 1446 (do^n 4) . SUS CONTRACTS SYDNEY ALL-ORDS Mth Open H/L Last Vol (half-points omitted) Oct 16300 350/300 6350 11 Prev. Dec 16346 346/346 6346 1 Mth close H/L Last Vol Contracts traded: 12. Sep 1520 543/530 540 923 Open positions at September Dec 1523 543/538 541 51 22: Oct 582, Dec 56, total 638 Contracts traded: 974. (down 20). Open positions at September GOVERNMENT STOCK 22: 5908 (up 13). Mth Open H/L Last Vol BARCLAY’S SHARE INDEX Dec 8722 728/722 723 956 Mth Open H/L Last Vol Contracts traded: 956. Sep 1984 990/984 987 6 Open positions at September Dec 1998 005/998 004 10 22: Dec 3076 (up 174). Contracts traded: 16. 90-DAY BANK BILLS Open positions at September Mth Open H/L Last Vol 22: Sep 94, Dec 50, total 144 Oct 8590 593/590 591 83 (down 6).

N.Z. FUTURES MARKET WEEK ENDED September 23 Trading Traded prices Total Open months This week To date this cont’s SUS High Low Last High Low week Oct '88 16565 16300 16350 16565 14901 466 582 Dec ’88 16650 16346 16346 17106 14717 19 56 Totals 485 638 Totals GOVERNMENT STOCK 11/93 Dec '88 8728 8712 8723 8749 8630 4169 3076 Mar ’88 — — 8790 8740 — —— Totals 4169 3076 90-DAY BANK ACCEPTED BILLS Oct ’88 8593 8576 8591 8615 8537 344 625 Nov ’88 8590 8590 8590 8620 8580 6 32 Dec '88 8623 8615 8622 8645 8100 180 643 Mar ’89 8640 8640 8640 8640 8200 10 113 Jun ’89 8650 8633 8648 8655 8320 12 26 Sep '89 — — — 8500 8470 — 7 Totals 552 1146 BARCLAY’S SHARE INDEX Sep '88 2000 1965 1987 2170 1930 48 94 Dec ’88 2010 1983 2004 2190 1978 75 50 Totals 123 114