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/en/bank-og-finansmarked/statistikker/vpforetak/aar
4053
Better result for securities broking enterprises
statistikk
2000-12-22T10:00:00.000Z
Banking and financial markets;Banking and financial markets
en
vpforetak, Securities broking enterprises (discontinued)Securities markets , Financial institutions and other financial corporations, Banking and financial markets
false

Securities broking enterprises (discontinued)1999

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Better result for securities broking enterprises

Norwegian securities broking enterprises saw their annual result increase by almost NOK 425 million from 1998 to 1999. The increase was mainly driven by sharply improved operating profits. Although revenues from brokerage trading declined somewhat from 1998, an increase in revenues from equity issue and consultancy activities was a major contributor to the healthy operating result for 1999.

Since new companies are established every year, comparing figures for the three years can be rather difficult. Whereas in 1997 there were 42 companies, the number grew to 56 in 1998 and 78 in 1999. Results for securities broking enterprises showed a decline from NOK 771 million in 1997 to NOK 229 million in 1998. This was followed by an increase to NOK 654 million in 1999. Per company this amounted to an annual profit of NOK 18 million in 1997, NOK 4 million in 1998 and NOK 8 million in 1999. Profits of securities broking enterprises are affected by the ups and downs of the securities markets, and securities firms chief revenues come from arranging the purchase and sale of financial instruments. Annual sales of shares and primary capital certificates on the Oslo Stock Exchange totalled NOK 341, 322 and 446 billion for 1997, 1998 and 1999 respectively.

Brokering revenues have declined every year from 1997, and in 1999 equity issue and consultancy services were the major sources of revenue for these firms. Increased competition is one of the reasons that brokering revenues have declined somewhat. This decline may also be due to the fact that more people use the Internet when trading in securities markets. Salaries are the largest cost factor for these companies, but despite the increase in the number of companies from 42 to 78, salary costs have risen slightly from 1997 to 1999.

On the balance sheets the value of short-term securities has remained rather constant during the period, although in 1999 the composition has changed in favour of a heavier weighting in shares at the expense of other securities such as commercial paper and bonds. Total holdings of shares and primary capital certificates have nearly doubled in 1999 compared with the two previous years. In 1997 and 1998 holdings of shares and primary capital certificates totalled NOK 817 and 730 million respectively, whereas holdings amounted to a solid NOK 1 450 million in 1999. Some of this increase is due to the new Accounting Act, in effect from 1999, according to which market-based current assets are to appear on balance sheets at market value. Securities firms had relatively large holdings of bonds in 1998 compared with 1997 and 1999. The weak equity market in 1998 was the reason why securities firms preferred bonds to shares in their portfolios.

Total assets under management increased from NOK 5 617 million in 1998 to NOK 8 007 million in 1999.

*Includes only securities brokingenterprises that are separate legal entities licensed by the Banking, Insurance and Securities Commission.