NCB to become market-maker

NCB STOCKBROKERS will join Davy and Goodbody by becoming a market-maker in up to 40 Irish quoted companies with effect from today.

The company is expected to announce this morning that it has received regulatory approval from the Irish Stock Exchange as a market-maker in certain securities traded on the exchange.

The list of securities in which NCB will make a market include the major banking stocks, industrial stocks and exploration stocks such as Tullow Oil.

NCB will quote prices in these securities throughout the continuous trading period on ISE Xetra, the exchange’s electronic trading platform, which automatically matches orders entered by buyers with sellers.

The decision, which has required an investment of €500,000 by NCB in the upgrading of its technology platform and control mechanisms, is expected to increase liquidity in the Irish equity market.

NCB head of equities Tommy Conway said the decision to act as a market-maker was a measure of its commitment to Irish equities.

“Hopefully it will improve liquidity. We think there is good value in many of the major stocks at the moment, but it’s been a very, very tough year for the market and for investors,” Mr Conway said.

“Confidence has obviously taken an awful battering not only in 2008 but in 2007 too,” he said.

As the bursting of the property bubble, contraction of the Irish economy and global credit crunch has taken hold, the Iseq index of Irish shares has taken a severe battering, falling 75 per cent since its peak in February 2007.

The value of the equities traded on the Irish Stock Exchange has also decreased, dragging down the stockbrokers’ commissions that are based on share transaction values.

For the first nine months of the year, the value of equities traded at €95.9 billion was down 37 per cent on 2007.

In response to the market malaise, NCB cut 10 jobs from its 180-strong workforce earlier in the year, while Davy axed up to 75 jobs and Goodbody implemented a recruitment freeze.

NCB, which also has offices in London, is a much smaller operation than its two main rivals but has a market share of 20 per cent or more in agency dealing of most Iseq-listed stocks.

The stockbroker is now in a relatively comfortable position to see out the bear market: it boasts a strong balance sheet with a cash cushion after it paid off all its debt.