Removal of brokerage fees likely: Kenanga

From the Business Times:

The government is likely to remove or reduce minimum brokerage fees to boost the equity market in the 2010 Budget, according to Kenanga Research.

It will be tricky for the government which has projected to cut 15 per cent of its operating expenditure to maintain a moderately high development in spending, said Kenanga in a statement today.

"Realistically, we expect the operating expenditure to be reduced by no more than five per cent, largely by way of reducing or restructuring subsidies which had ballooned to about 22 per cent of total operating expenditure from just 8.5 per cent in 2007," it added.

The government will need to allocate more than RM50 billion in development expenditure for 2010, said the research house.

The 2010 Budget is also expected to include the removal or reduction on stamp duty for properties above RM250,000 to stimulate property purchases, according to Kenanga

I've left in some other items outside of brokerage fees for those who are interested in the 2010 budget. The reduction in transaction fees are a boon to the financial sector. If they could set the fees at a flat rate instead of a percentage, then the change in plans could benefit many financial companies.

The way of commissioned brokerage should go out of fashion. For those that don't need or want personal brokers taking a share of their profits, they should get the right to lower fees. Not only is it good for the retail investor, but the stock market benefits from higher liquidity resulting from investors worrying less about making up the transaction costs in buying and selling securities.