Brokerages made money amidst volatility in July

13 August 2007

While markets have been volatile, brokerages have been making huge money. July saw record market turnovers pretty much through the entire month. In the US too, the Chicago Board Options Exchange (CBOE) recorded a huge jump in profits.

Will the good times continue? If one extrapolates the data and does a sort of a head-of-the-curve analysis, on what the numbers could be for Q2 - if one looks at the July turnover, then the NSE cash turnover was about Rs1.03 lakh crore, which is double of what it was in July last year.

In fact, the NSE cash was more than double from 1.18 to 2.67 and NSE F&O from 4.77, went upto 10.15. Overall, it's about 115 per cent increase from July '06 to July '07. That's the kind of volatility and market volumes that we saw in the month of July.

Even if you had to analyse the companies on quarter-to-quarter basis, because these are high growth companies; even then the July month itself, was around 50 per centof the entire Q1. It as about 25 per centhigher than June; of course, in itself was quite volatile.

So, if you were to extrapolate that, then the turnover would be 30-40 per centhigher in Q2 compared to Q1, even if you look on quarter-on-quarter basis. So definitely, we are looking at higher turnovers for the bourses.