Mumbai brokers trigger Chennai stock market

Salaries rise, work gets professional

The growing presence of Mumbai-headquartered stock brokers in Chennai has triggered big changes. Salaries have risen and more professionals have entered the field. In short, it seems to have become an employees' market.

P B Subramaniyan, executive director of Apollo Sindhoori Capital Investments, a Chennai-headquartered outfit, says that the current trend has set in over the last two years.

That is roughly the period when the bull run in equities started. The growing business in Chennai of Kotak Securities, Sharekhan, Motilal Oswal and other "national brokers" has brought about changes.

The rise in salaries has had some benefits for local stock brokers too. The higher salaries have drawn better qualified people and made the whole set up more professional, says M Amarnath, director of Patco Investments.

The mix of motivated people and opportunities has resulted in catapulting dealers to salary levels that were perhaps unimaginable a few years ago.

According to a local stock broker, a new dealer could draw a salary of Rs 7,000 a month. If he turns out to be good, the salary could reach up to Rs 20,000 in two years. The next step soon after could be a position with a national broker with another 50 per cent or more added to the salary.

A branch head of a national broker says that dealers with national outfits earned up to 25 per cent more than dealers with local stock brokers till a few months ago. Now, local brokers have narrowed the gap to about 15 per cent, he adds.

This is a situation that Subramaniyan says, he has never seen in his 10 years in the industry.

The bigger salaries at national brokerages could be partly the result of using Mumbai as a benchmark, say some in the industry. The other factor may be the huge volume that national brokers generate.

A local stock broker feels that national brokers draw a lot of clients through "day trading" (people who trade in a way that neutralises the need to deliver shares).

Dealers at national brokerages draw their bonuses from the volume generated, and the bonuses make the real difference in take-home pay, he adds.

How much longer is the party going to last? Amarnath says that salary structures are closely linked to the earnings of a broker. It all boils down to the boom in the stock market.