Forsyth Barr takes up half of broking business

Forsyth Barr is to buy 50 per cent of Sir Selwyn Cushing's broking business Esam Cushing.

Cushing, whose stake will fall from 25 per cent to 12.5 per cent when the deal goes ahead on May 31, said the company had made the decision to sell after carefully considering the interests of clients and staff.

Paul Clothier, Esam Cushing managing principal, and the largest shareholder, said it was a tough market for a small broking firm.

"There are quite a lot of pressures on a small sharebroking business and we are the only one left anywhere near our size doing full trading, settling and advising. [By doing this] we are really trying to get the best out of our resources."

The change of ownership will mean Forsyth Barr will take over NZX trading settlements and provide research for Esam Cushing.

The move follows that of Wellington's McDouall Stuart which pulled out of handling direct trading in March.

Christchurch-based Hamilton Hindin Greene outsourced its settlements to ANZ-owned Direct Broking last year.

The changes come as stock exchange operator NZX prepares to launch a new clearance trading system where only some companies would be accredited to trade directly with it.

Clothier said the change of ownership would be a big shift for the firm which has been around for about 100 years.

It had decided to sell to Forsyth Barr because the deal allowed it to maintain its independence through its remaining 50 per cent share.

Forsyth Barr has added 11 branches to its network in the past 18 months and now has 19 in total with 110 investment advisers.