Iran Brokerage Industry Reports Higher Profit

EghtesadOnline: Financial records of Iranian stock brokers show the domestic brokerage industry earned 6.6 trillion rials ($59 million) in net profit in the last fiscal year that ended in March.

News ID: ۷۸۴۹۷۸

28 October 2019

According to a report by the Securities and Exchange Brokers Association (SEBA), the figure indicates 171% growth compared to a year before.  The stock brokers’ net profit hit the highest in five years.

According to SEBA, the operating income of brokerage firms have not been consistent in the past five years. Brokerages’ operating income was the lowest at 5.4 trillion rials in fiscal 2014-15, down 14% compared with a year earlier.

This is while the industry made 11.6 trillion rials in operating income last year to record an annual rise of 75%, according to Financial Tribune.

Operating expenses of the industry showed 35% growth last year.

Operating income is a figure that measures the amount of profit made from a business operation, after deducting operating costs such as wages, depreciation, and cost of goods sold.

Operating expenses, on the other hand, include expenses through normal business operations. Often abbreviated as OPEX, operating expenses include rent, equipment, inventory cost, marketing, payroll, insurance, step costs, and funds allocated for research and development.

Over the past five years, the total assets of brokerage companies have grown 316%.

The report added that the number of loss-making companies fell from 25 in fiscal 2017-18 to eight in the last fiscal year.

Leading Players

According to data published by the Tehran Stock Exchange website, five brokerages accounted for more than 27% of total trade in the capital market during the first two months (March 21-May 20) of the current fiscal.

Mofid Securities Company was in the lead processing 11.78% of the trade followed by Agah Brokerage with 5.80%, Pasargad Brokerage Company 3.81%, Farabi Brokerage and Securities 2.89%, and Refah Bank Brokerage Company at 2.88%.

Online trading, worth 427 trillion rials ($3.11 billion), accounted for 47% of the total capital market trade during the two months.

Out of 108 brokerages, 104 offered online services. The top five online-trading brokerages were Mofid Securities Company with a share of 22.18%, Agah Brokerage 10.23%, Farabi Brokerage and Securities 4.86% of online trade, Mobin Sarmayeh Brokerage 3.14 %, and Tadbirgaran Farda Brokerage Company with 2.90%.