SMILES have replaced the frowns on stockbroking dealing desks, as the rallying sharemarket and low interest rates drive investors back to equities.
"There's no doubt we're busier than any other time post the GFC for secondary market trading activity," said Mike Johnson, head of sales at Macquarie Securities' institutional desk in Sydney.
"What we're seeing is actually a broad-based increase in activity, a rotation across the board by our clients because they're all reacting to an improved perceived macro environment."
Last week, secondary market volumes recorded their strongest week in almost a year and are tracking ahead of the same time last year, as the average daily value of trading returns to $5 billion-$6bn, according to data from the IRESS trading platform.
Citi has maintained its lead over rival UBS in market share, followed by Macquarie, Deutsche Bank and Morgan Stanley.
As debate rages about the amount moving out of bonds into equities, Mr Johnson said it had only just begun and could provide further support to the market, already up 8 per cent this year.
"There's no doubt when you talk to our clients they think that at the asset-owner level (their clients) are yet to move major allocations to equities, they haven't seen the big inflows come yet into equities and that money still seems to be on the sidelines," he said.
While it is still early days, the return of interest in equities is a boost for brokers who have in recent years suffered as money moved into bonds and as electronic trading cuts into commissions and regulatory costs rise.
Last year, stockmarket turnover sank 18.5 per cent to $2.2 trillion, the softest since 2005.
"There's money coming into the market and funds (managers) are active. It's very indicative of real volume, not fluff," said Nomura head of research sales Ben Shakespeare.
One area of hot activity has been in block trades, with fund managers increasingly keen to execute away from the "lit" markets to reduce impact on prices. High-yielding stocks such as the banks continue to be keenly bought.
Veteran broker Colin Bell, the chairman of Bell Potter and owner of Bell Financial Group, which last week posted its first full-year loss as a listed firm, said demand from retail clients had risen "significantly" this year, in a positive for the entire industry.
"The market's up and all of a sudden clients we have not heard from for some time are back on the scene . . . (but) when the market's quiet, lousy, directionless and no one has any confidence, no one does anything," he said.
