The publication titled ‘Competitive Analysis of Top 25 Financial Brokerages in KSA - Financial & Operational Performance, Future Plans and Recent Developments’ undertakes analysis of the Saudi Arabia Capital Market Trading Industry, Business Model & revenue streams adopted by key players, Trading Channels used by participants, Investor ’s Overview (Retail & Institutional) and Industry’s Future Potential.
Gurugram, India, June 30, 2021 (GLOBE NEWSWIRE) -- Saudi Arabia economy has been relying heavily on hydrocarbons industry; contributing > 40% of GDP (2015). As oil market experienced boom during 2003-2014, the country's overall GDP grew by ~5% (annualized). Being one of the largest oil producers in the Middle Eastern region, KSA jumped from position of 27th largest economy in world in 2003 to 19th in 2014.
However, as oil prices plummeted across the world, KSA economy experienced shrinkage in GDP for the first time post financial crisis. But, during such tough times, its non-oil private sector grew by 0.9% for the first time since 2015. It was only after this event that the government of Saudi Arabia decided to shift its heavy reliance on oil for its overall economic development. On lines of development of non oil sector, the government introduced Vision 2030 in year 2016 with a part being accredited to increased role of private & public investments.
In 2019, Saudi Arabia state controlled oil firm "Aramco" launched its IPO of USD 25.6 Bn surpassing amount raised by Chinese firm Alibaba . The trust on state owned firm attracted large number of individual investors however failed at attracting expected international investments owing to concerns related to transparency, government practices, security and other related factors. In 2019, number of non-institutional investors grew at a rate of ~15% reaching 5.47 Mn investors as of December 2019, while institutional investors still dominate >90% of value traded in the financial markets.
With majority of brokerage houses being bank based, the financial brokerage industry in Saudi Arabia is considered to be highly fragmented in nature with ~70% of market share (basis Revenue) being occupied by top 25 players with Al Rajhi Capital dominating the market. Following a uniform pricing of 0.15%, majority of players in the market compete on the basis of parameters such as trading platforms provided, investment instruments, international investment opportunities and others. Some of the players cater majorly to institutional clients by offering PMS, DPM and Investment Banking services.
Till 2019, investors had the option of investing only in Equity and Debt markets. Therefore, brokerage housed were providing an option to diversify their portfolios, most of the players in the industry provide opportunity of investing in international markets like US, Europe, GCC & some of Asia Pacific countries. In July 2020, Tadawul and Capital Market Authority introduced derivatives trading in the markets.
With launch of Derivative products in 2020 (starting off with Futures), the market is expected to soon start trading in Options & Commodities as well thereby completing its investment opportunities ecosystem.
Tadawul has also been witnessing several regulatory & infrastructural reforms in order to attract more FDIs to the country. As Tadawul becomes the second exchange in GCC region to provide Derivatives trading, it will act as a huge opportunity for GCC. Already started with part privatization of Armaco, the country is expected to witness higher number of IPO deals and increased participation of retail investors as well by 2030. With such driving factors already set in pace the analysts at Ken Research expect the Financial Brokerage industry to grow at a CAGR of ~10% by 2024.
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Al Rajhi Capital
Saudi Fransi Capital
HSBC Saudi Arabia
EFG Herms Saudi Arabia
Merrill Lynch KSA Co.
Falcom Financial Services
Deutsche Securities Saudi Arabia
Al Khair Capital
Emirates NBD Capital
Citigroup Saudi Arabia
Time Period Captured in the Report:-
Historical Period: 2015–2019
Forecast Period: 2020-2024
Key Topics Covered in the Report:-
Industry Overview- Key Trading Statistics for Equity, Sukuk & Bonds, ETFs and Mutual Funds
Investor 's Overview
Trading Summary-Value, Volume & Number of transactions, Online Trading and Sukuk & Bonds Trading statistics across top 25 players
Operational Indicators- Number of Individual Clients & portfolios, Online traders, AUM, Customer Acquisition Cost, Net Adjusted Working Capital and Number of Investment Centres for top 25 players
Pricing parameters for local & International Stock Exchanges
Financial Indicators covering Total Revenue, segmental Revenue, Operating Expenses, Operating Profit, Net Profit across top 25 players
Al Khair Capital Financial Brokerages Market Revenue
ANB Invest Financial Brokerages Market Revenue
Financial Brokerages Industry In KSA
GIB Capital Financial Brokerages Market Revenue
HSBC Saudi Arabia Financial Brokerages Market Revenue
KSA Financial Brokerages Market Major Players
KSA International Trading Market
KSA Total Number Of Female Investors
KSA Total Number Of Male Investors
KSA Total Number Of Non-Institutional Investor
Riyad Capital Financial Brokerages Market Size
Saudi Arabia Financial Brokerages Industry
Saudi Arabia Financial Brokerages Market
Saudi Arabia Financial Trading Industry
Saudi Non Institutional High Net worth Investors (HNWI)
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The credit and debit card business of Turkey has witnessed strong growth owing to increasing value of transactions, volume of transaction and cards in circulation. The debit card value of transaction grew at a rate faster than that of credit cards, even when both posed double digit growth rate. Adoption of specific payment methods in Turkey will inevitably be influenced by the fact that a large proportion of Turkish citizens remains without a bank account – just over a third of the population is unbanked. The use of cash is particularly prevalent for micropayments including the small and daily expenditures such as newspapers, taxi journeys and coffees. The payments industry of Turkey will have to work hard to mitigate Turkish shoppers over to digital methods of paying for these items.
Brokerage Model of assigning a relationship manager & undertaking all trade related services from trade execution to overall portfolio management by charging high brokerage of 0.3-0.6%. Competition in full service brokerage is concentrated among top players including ICICI Securities, HDFC Securities, Kotak Securities, ShareKhan, Motilal Oswal etc competing on the basis of pricing, services offered, offline network, q uality of advisory & research services offered, trading platforms etc. With increased financial & technological awareness, pricing became the top most consideration for millennial tech savy investors leading to emergence of discount brokerage model. However in current situation we see a changing trend of investors preferring to pay only for the services availed thereby forcing various FSBs to launch subscription/fee per service plans thereby making them hybrid in nature. As this trend is expected to continue in future, we might see some of the leading full service players like ICICI Securities converting their operating models to hybrid model.
The E-money segment of the report includes analysis on market size by number and value of transactions, trends and developments, issues and challenges and government regulations governing the segment. The Payment Aggregator segment outlines the operating model, different commissions charged, market size and competitive landscape of major players including company profiles, heat maps and cross comparison matrix. The report concludes with covering the future outlook and analyst recommendations. The recommendations involve key strategies for the existing players to cope up with the declining margins and ensure their profitability for the coming years.
Global Payment Gateway Market Outlook to 2024 – By Region (APAC, North America, Europe, North America, Middle East and Africa, and Latin America) and End-User Industry (Retail, Transportation, Government, Banking and Financial, Telecommunications and Others)
The Global Payment Gateway Market was observed to be at growth stage as more countries are introducing open banking initiatives where banking systems are being open to third party service providers. As more companies are set to enter the market, margins are expected to decline which is driving consolidation along the value chain and from other industries, FIS and Worldpay, and Fiserv and First Data for instance. The shift to real time payment processing is driving modern payment service providers to introduce value added services in addition to payment processing. Penetration of smart phones and internet will drive the adoption of mobile payments, especially in emerging countries with low banking population.
Indonesia Financial Brokerage market was observed in a growing stage wherein the market experienced slow growth during the review period 2013-2018. During 2013-2015, a decline in growth rate was observed in Indonesia Financial Brokerage market due to the external factors of slowdown in Chinese economy, placing of restrictions on funds borrowing by the Federal Reserve and capital flight from Indonesia's economy which led to increasing interest rates by the Bank of Indonesia. The phase also experienced presidential and parliamentary elections and continued low awareness among the investors regarding the financial markets. Despite the decline, the financial brokerage industry started recovering in 2016 and has been experiencing a positive CAGR growth till date. Major growth drivers include stable positive economic outlook of Indonesia, inflow of foreign investment, rising number of global strategic partnerships by the brokerage firms, low market capitalization and others.
Philippines Financial Brokerage Market Outlook to 2023 – By Equity on Basis of Transaction Value, By Transaction Mode (Online & Offline), By Basis of Time of Delivery (Intraday & Delivery Based), By Type of Investor (Domestic & FII)
The Philippines financial market is currently one of the most promising financial markets in South-Asia with very few financial products offered for trading at present but will increase in a few years. Trading activities in Philippines is highly regulated Due to very low trading volume & relatively fewer trading accounts; most of the brokerage firms provide brokerage services at the lowest cost prescribed by the SEC. The players currently charge brokerage fees for equity trading and plan to expand financial services towards asset management, mutual funds, wealth management, algorithmic trading, top picks and other services that can lure the customers. The industry grew at a negative CAGR during this period. The overall revenue in the financial brokerage industry witnessed a rising trend on account of a reduction in simplification of tax structure for trading, increasing investor's confidence & political stability in Philippines in last year.
Ankur Gupta, Head Marketing & Communications
CONTACT: Ken Research Ankur Gupta, Head Marketing & Communications Ankur@kenresearch.com +91-9015378249