Investment Banking and Securities Brokerage in Australia Industry Market Research Report Now Updated by IBISWorld
Melbourne, Australia (PRWEB) July 23, 2013 -- The Investment Banking and Securities Brokerage industry in Australia has rode out the financial storm that raged from 2007-08 to 2009-10. Compared with overseas firms, Australian participants have been relatively successful. According to IBISWorld industry analyst Andrei Ivanov, “their performance was supported by continuing investment into mining, and low exposure to subprime mortgage-backed securities.” However, the journey has not been without hiccups.
The industry welcomed the rebound in the sharemarket in the later part of 2009. “Companies have capitalised on this opportunity by issuing secondary offerings and raising capital to strengthen their balance sheets,” says Ivanov. This has helped to support investment banking fees. However, the number of initial public offerings (IPOs) has remained low. Ongoing volatility in the markets has reduced confidence among management and put many IPOs on the back burner. On a positive note, revenue generated from derivatives transactions has spiked, as companies and investors tried to hedge their risk. Overall, Equity Capital Markets (ECM) revenue has remained low in recent years. The number of M&A deals has been increasing, but the average transaction value of these deals has fallen, leading to negligible revenue growth from this segment. Brokerage firms have benefited from an increasing amount of trades, but faced growing competition from online trading platforms, which continuously squeezed their profit margins. As a result, industry revenue is forecast to grow by only 1.2% in 2013-14 to $9.6 billion. Over the five years through 2013-14, the industry is forecast to grow at an annual compound rate of 3.3%. The different activities in the industry have varying degrees of market share concentration, but overall concentration is low throughout the industry. Major players include Macquarie Group Limited, Goldman Sachs Australia Group Holdings Pty Ltd, UBS Holdings Pty Ltd and Citigroup Global Markets Australia Holdings Pty Limited.
It is unlikely that the Investment Banking and Securities Brokerage industry will return to the stratospheric growth rates seen during the pre-financial crisis times. Increasing regulation is expected to force the investment banks to reduce their focus on traditional and more risky investment banking activities. As economic growth returns and companies begin to search for investments and funding, investment banks are anticipated to generate higher fees from M&A and ECM transactions. The growing number of sharemarket trades is going to be favourable for brokers. However, this may be offset by lower commission fees as brokers try to compete with online trading platforms. Relative consolidation is expected among brokers in the near term.
For more information, visit IBISWorld’s Investment Banking and Securities Brokerage report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry provides investment banking and brokerage services. Brokerage services include trading stocks, shares or other financial assets on a commission or transaction fee basis. Investment banking activities include corporate finance and advisory services, underwriting and principal trading.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
Gavin Smith, IBISWorld, 310-490-5973, [email protected]
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