All is certainly not well at Dalal Street. The sad state of affairs can be gauged by the fact that stockbrokers who cater to the institutional segment have reduced salaries by 20 per cent for the second time in the last six months, primarily due to declining revenue. So much so that there is a looming danger of institutional business being shut down at several brokerages if this trend continues for another couple of quarters, leaving scores jobless.
Trading volumes have dwindled since August as FIIs have been net sellers of equity. Domestic institutional investors do not have the wherewithal to act as a counterbalance implying lower income for institutional brokers. With FII proprietary books and hedge funds vanishing, brokers are now left with long-term investors who do not generate trading volumes.
Source: The Hindu Business Line