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Jardine Fleming prepares for uncertainty, trims staff
Sharad Mistry
MUMBAI, January 13: The south-east Asian financial crisis has begun to have a direct effect on foreign brokerages in India. Jardine Fleming India Securities, the securities arm of the Hongkong-based Jardine Fleming, has made "minor changes" in its staff strength at Mumbai. Some of the other foreign brokerages too are understood to be feeling the pinch in a business that's not very rewarding at the moment.Of the total 36-plus foreign brokerages registered with SEBI, hardly a handful of them are currently operating -- and that too at a loss -- in a market characterised by sharply declining business and far too many players. Some of the players have already quit prematurely. Among others, these include BZW, NatWest Securities, and Deutsche Morgan Grenfell's DMG Securities (equity desk). They quit the Indian scene even before beginning any operations. The gloom is not restricted to foreign brokerages alone. The Ruias are the latest to join the list of corporates getting out of the business. Their brokeragefirm -- India Securities -- stopped operations in December 1997. Last year, Reliance Share & Stock Brokers of the Ambanis had stopped its stockbroking activities. The impending liquidation of Peregrine Holdings, though for altogether different reasons, has unnerved many a leading foreign brokerage operating in India, either independently or with their Indian partners. Jardine Fleming's step to trim staff comes in the wake of its Asia-wide changes to its research product last month to give it a greater cross-border industry emphasis, in line with the requirements of its clients, said Robert Gibson, country head, Jardine Fleming. In a faxed message to queries sent by The Financial Express, Gibson said "no further changes are anticipated here in Mumbai." Gibson, however, was silent on the specifics of the changes made. According to informed sources, this step may be a precursor to some other Asia-wide changes, including sharply pruning the stockbroking operations altogether. Jardine Fleming's
stockbroking outfit has been making losses over the past two years. Last year's loss, according to informed sources, was over Rs 7 crore. Following this, it has not only frozen any fresh recruitment, but has also asked some of the senior research analysts to quit. In its latest move, it has reportedly asked some 20 staffers in the securities division to look for employment elsewhere by March 31, 1998. Informed sources say, Jardine Fleming is desirous of selling its stockbroking outfit and this could be the beginning of the end of Jardine Fleming in India. Even its investment banking outfit has hardly been rewarding, more so because of the continued lack of business, both domestic as well as global. Also, research is the backbone of any respectable stock brokering firm. If the size of this division is pruned, no brokerage can offer well-researched investment product to its clients.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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