Too many cooks

8 October 2010 By Nicholas Paisner

Investors’ love affair with bonds is hurting banks that bet big on trading equities. Volumes are flat, commissions are under pressure, and it has been a slow year for new issues and derivatives. Barring a pickup in activity, newer entrants face some tough choices.

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Average daily trading volume in FTSE 100 stocks was 2 percent higher in August 2010 than a year earlier, according to the London Stock Exchange.

U.S. equity capital markets activity was 31 percent lower in the first nine months of 2010 than in the comparable period last year, according to Thomson Reuters. New issuance totalled $110 billion.

European, Middle Eastern and African ECM activity fell 45 percent yearonyear, with a total of $100 billion of new issuance.

Asian ECM volumes rose 76 percent to $180 billion. Chinese share issues raised $110 billion.

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