Negative Indicators

The island’s 29 member strong  stockbroking industry in the financial year ended December 31, 2011 saw turnover decline by 13% year on year (YoY) to Rs. 5.7 billion.
Net brokerage in the review period declined by 12% YoY to Rs. 5.5 billion, operating profit during this period retreated by 35% YoY to Rs. 2.6 billion and net profit after tax by 34% to Rs. 1.8 billion.
Meanwhile market capitalization as a percentage of GDP in the review period declined from 39.4% to 34% of GDP.
However there were also a few positives in this “gloom and doom” scenario. For instance SEC’s broker license fees in the review period increased by 63.3% YoY to Rs. 3.6 million and income as a whole by 48.4% to Rs.42.9 million.
But on the flip side, total expenditure, led by capital market development expenses increased by 3.6% YoY to Rs. 227.9 million. Capital market development expenses in the review period increased by 83.2% YoY to Rs. 41.1 million. SEC bridged its income to expenditure deficit by transferring a sum of Rs. 192.4 million from its cess fund as opposed to a Rs. 195.8 million figure the previous year.
The cess fund closed the year at Rs. 2.2 billion, a 39.4% YoY increase (Source: SEC’s 2011 Annual Report).