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A revival in the equities market and uptick in trading volumes has triggered a wave of fresh hiring at domestic broking houses.
According to industry players, broking firms have begun to rope in fresh recruits across departments like equity research and sales after a gap of almost six years.
Brokerage firms were last seen ramping up operations in the period between 2006 and 2008 as the markets were buoyant and retail participation was high.
Industry officials say the total head count this fiscal year could go up between 20 and 30 per cent if the market optimism sustains.
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“We are definitely open to hiring and will look at selectively recruiting people for the front line, sales, research and advisory desks. Interest from retail has started to come back, cash (segment) volumes have gone up and things are looking very positive so far,” said Sameer Kamath, chief financial officer, Motilal Oswal Financial Services.
Equities had become an unpopular choice as an asset class for retail investors from 2008 to 2013 when returns declined sharply. Equities as a portion of the retail portfolio shrank to about 10 per cent from 50 per cent earlier and brokerage firms branched out to other businesses like private wealth and real estate advisory, among others.
A lot of retail brokerages had either shut down or sold out as growth opportunities dwindled. However, hopes of a change of guard at the Centre after the general elections resulted in a strong rally in the markets since January this year. So far this year, equities have risen by about 16 per cent. According to industry officials, the number of such daily inquiry calls, from existing, inactive and new clients, has gone up by 35-40 per cent since the election result.
“We are looking for customer care executives, on the sales side, those who can answer customer investment queries and calls -- which have seen a sudden rise. On some days, there is an almost 50 per cent jump in the number of such calls received over previous times,” says Jaya Jacob Alexander, chief of human resources, Geojit BNP Paribas Financial Services.
With the market rally becoming more broad-based, brokerages are planning to beef up their coverage of stocks, which is largely restricted to the top 100 companies. Industry officials say that over the last six years, several stocks in the capital goods, engineering, power and mining sectors had gone out of the research universe as trading interest in these had decreased.
“There was a freeze on hiring and existing analysts were given additional charge of sectors and stocks which were not heavily traded in. But the job market has certainly improved now as people are hiring in anticipation of an improvement in the business environment,” says Rahul Arora, chief executive officer, Nirmal Bang Institutional Equities.
A sharp improvement in valuations of broking stocks has also improved the sentiment at broking houses. Stock prices of domestic brokerages including Geojit BNP Paribas, Axis Capital Markets and IIFL Holdings have risen by more than 80 per cent each in 2014.
However, industry officials caution that firms are still not hiring on a large scale across departments, similar to the hiring seen prior to 2008.
“Full-scale mass hiring is still about 4-5 months away as people want to see how sustainable this euphoria is. Confidence will be hit if the market rally is unable to hold on to the gains,” says Arora.
