An increasing number of investors on the Stock Exchange have taken to transmitting trading orders by Internet, and not by phone or fax. Brokerage companies are taking notice.
Two years ago, there was only one company that would take trading orders online, while at present there are five such companies. Other companies, including Raiffeisen Bank, Intercapital Invest and IEBA Trust are also planning to launch similar services.
Vanguard brokerage launched the first service of this kind five years ago, helping it become one of the top ten companies on the Romanian market in terms of value traded on the Bucharest Stock Exchange (BSE). Investor interest in Internet trading has allowed the company to retain its market share, despite the entrance of new players. "Amid a significant rise in the value traded on the BSE in 2004, Vanguard's Startrade Internet trading services saw a slight increase in market share in terms of total transactions performed on the BSE," says Mihaela Baciu, Vanguard general manager.
Estinvest, a brokerage company with headquarters in Focsani, launched a similar service almost one year ago. Brokers at Estinvest say the service has strengthened their revenues significantly. "We recently did some research that showed that Internet trading services brought us a plus of 20-25% in terms of revenues from commissions," says Marcel Murgoci, an operations manager with Estinvest. On the other hand, the site has also helped the company attract investors who prefer traditional ways of conveying trading orders, by phone or fax, he added.
"We have customers from all areas of the country, even from cities where we don't have an agency, and our Internet site offers the opportunity of opening an account without the investor having to come to us. Our customers include several Romanians from the United States who trade on the New York Stock Exchange and wanted to have a try at the Romanian Stock Exchange as well. They find it much easier to send orders because there is a time difference and, moreover, costs are lower," explained Murgoci.
The other brokerage companies offering online trading are: Prime Transaction, IFB Finwest and Romintrade. Apart from stock trading, Vanguard also offers the possibility of transmitting orders by Internet for the derivatives market of the Sibiu Stock Exchange. However, the services brokers currently offer via the Internet are in fact only a way of collecting trading orders from customers and are still a far cry from the real online trading services available in developed markets. Traders still introduce trading orders manually into the market's electronic system, while in developed markets everything is done electronically, without trader intervention.
vlad.nicolaescu@zf.ro
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