It's over: "Internet Brokers Face First-Ever Drop in Trades, CSFB Says
Internet Brokers Face First-Ever Drop in Trades, CSFB Says
San Francisco, Aug. 3 (Bloomberg) -- Internet brokers could
see their first-ever quarterly decline in trading volume in the
third quarter because of weakness in the Internet stocks their
customers favor, said Credit Suisse First Boston analyst Bill
Burnham.
Brokers' volumes in July were ``only slightly' above June
levels and were ``clearly lower' than April's record volumes,
Burnham said in a research note this morning. And their shares
will suffer as a result, said Burnham, the author of widely
watched industry-wide online trading statistics since early 1997.
``Based on this analysis, it is probable, but not definite,
that Q3 may witness the first-ever sequential decline in online
trading volumes,' he wrote. ``This is clearly a short-term
negative for the group. We don't expect a recovery until late
September or mid-October.'
Shares of Internet brokers have declined since early July,
when companies' earnings reports confirmed Burnham's estimates
that trading rose 10 percent in the second quarter, down from 47
percent in the first. In the six months ended March 31, trading
volume had doubled.
E*Trade Group Inc., the No. 2 online broker, fell to 28 7/8
in early trading from 29 yesterday. It's down 27 percent since
July 1. No. 6 Ameritrade Holding Corp. rose to 24 1/8 from 24
yesterday. It's down 31 percent in a month.
Knight/Trimark Group Inc., the biggest Nasdaq market maker,
which gets half of its order flow from online brokers, rose to 41
3/4 from 41 1/4 yesterday.
In New York Stock Exchange trading yesterday, TD Waterhousue
Group Inc. fell 1/4 to 17 1/4, DLJ Direct Inc. fell 3/8 to 21 1/8
and Charles Schwab Corp. fell 1 5/8 to 42 7/16.
Burnham bases his statistics on spot checks with brokers and
actual trading in certain stocks that are actively bought and
sold by online investors.
``Weakness in Internet stocks appears largely to blame,'
Burnham wrote. ``July share volumes in our tracking group of
Internet/high tech stocks fell 54 percent vs. April 1999,' the
last time brokers reported earnings.
--Randy Whitestone in the New York newsroom (212) 940-180 |
