More News
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 |
