Monday, November 26, 2007

Online Broking - Evolution and Strategic Initiatives - International


Following the adoption of the Internet as a key trading channel by major players during the past several years, the US broking market witnessed explosive growth. There were around 18 million online accounts31 with more than 1 trillion USD in assets in 2000 -- more-than double the 7 million accounts and 430 billion USD in assets in 1998. Online trades accounted for more than 40 percent of all retail trades in the US market. In just three or four years, both average online trades per day and the number of online broking firms rose more than 10 times to 1.1 million trades per day and 200 firms in 2000..

From a later starting point, online brokerage is also showing spectacular growth in other countries.

The European market more than doubled to 3.7 million accounts in 2000.

Germany has taken the lead in terms of absolute numbers with around half of the market, followed by Sweden, France, United Kingdom, Netherlands, Italy and Spain.

There are already around 150 players on the European online broking market.

There were an estimated 305,000 online investors in the United Kingdom in the first quarter of 2001 (up by 6 per cent from 2000:Q4), and the number of online trades was 776,000.

In Japan, according to a March 2001 survey, there are 1.9 million online trading accounts, an increase of 46 per cent in six months. More than a third of stock trading by individuals (“retail trades”) was conducted online during the six months from October 2000 to March 2001.

In Hong Kong, China there was a staggering 99 online brokers in April 2001 (and an additional 8 brokerage advisors), but no information is available about the number of actual clients.

In Turkey, and estimated 13 per cent of the daily orders on the Istanbul Stock Exchange in early 2001 were conveyed to brokers via electronic networks. On current information, e-broking penetration (defined as the number of online brokerage accounts relative to total population) is internationally high in countries such as Canada, Korea, United States and Sweden.

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