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Ireland: Statistics Reveal Widening Gap Between Stockbrokers

Robert Lee, Tax-news.com, London

07 February 2001

The introduction of the Xetra settlement system last year has meant that the Irish Stock Exchange (ISE) has been able to maintain detailed records of the amount of business transacted by Irish stockbroking companies. Latest statistics show that two brokers dominate the Irish share trading arena - Davy Stockbrokers, owned by Bank of Ireland, and AIB-owned Goodbody.

Almost three-quarters of the I£14.57bn of business in Irish stocks transacted on the ISE in the last seven months of 2000 was handled by Davy and Goodbodys. Opinion amonst institutional investors is that the two are growing at the expense of other Irish brokers.

Between June and December 2000, Goodbody made the largest number of individual transactions on the ISE, reflecting its domination in the private client business. It is considered to have the largest share of the private client market and rakes in huge profits due to the higher commissions charged to retail investors.

The higher commissions certainly do not seem to have put investors off - Davy and Goodbody hold such a large market share, that there is little room left for the other big brokers, namely NCB and ABN Amro. There are other firms, such has Merrion, Bloxham, BCP and Dolmrn Bultler Briscoe, but their market shares are very small by comparison.

In the Irish press this week, however, one senior stockbroker yesterday cast doubt on the usefulness of statistics which, he claimed, did not measure all the turnover in Irish equities. Broking giant Merrill Lynch, for example, is a member of the ISE, but the unnamed broker claimed its trade was still transacted through the London Stock Exchange's SETS system, and therefore it is excluded from the Xetra statistics.

Nonetheless, there is now clearly a Big Two in the Irish stockbroking arena. Davy and Goodbody have squeezed the market share of other players and now control upwards of two thirds of the Xetra trade in Irish equities.

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