Finweek English Edition - - INVESTMENT -

tranches of, say, 20 shares, each in­cur­ring the bro­ker f ive fee sets. The prob­lem was that the bro­ker had no idea how much a trade would end up cost­ing and so the on­line bro­kers all im­ple­mented a min­i­mum trade fee cou­pled with a per­cent­age-based fee charg­ing which­ever was higher. The new billing method will see a f lat 0.0053% charged (with a cap of R350), so now bro­kers will know ex­actly what their cost will be. This should en­able bro­kers to do away with (or at least markedly re­duce) their min­i­mum fee and hence smaller trans­ac­tion sizes will be vi­able on the mar­ket. a min­i­mum. The re­sult was a stark sell­off of some 10%. The les­son is sim­ple: ex­pec­ta­tions and stock prices are high and com­pa­nies can­not af­ford to dis­ap­point oth­er­wise the sell­ers will ar­rive in force.

Nampak Limited

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