The news that Vickers Ballas, the venerable old Singaporean stockbroker, is in talks to merge or be acquired by another financial institution, should come as no surprise to anyone. Since the government announced and then deregulated stockbroking commissions in October last year, the mollycoddled world of Singapore stockbroking has been set for a shake up.

No firm recognized this more clearly than Vickers. Before the deregulation of commissions had come into effect, the stockbroker had concluded merger talks with another fine old Singaporean institution, GK Goh stockbrokers. That deal was eventually scuppered when shareholders controversially did not approve the plan.

Since then, Vickers has been on something of a rebound, jilted at the altar by her one dashing prince and desperate to get hitched to another. In a statement to the Singapore Exchange the firm announced that "it is in discussions with various parties to explore various proposals involving, inter alia, new investments and possible integration of part or all of the group's operations with the relevant parties."

Who these parties might be is the subject of much speculation. Most mentioned by analysts is Kim Eng Securities, a similar sized financial services company that faces the same pressures as Vickers. Other firms mentioned are DBS Securities, which, given its size, would probably acquire Vickers, or even Kay Hian - which last year merged with UOB securities.

However, the forces that blew the previous GK Goh merger are still at work. It was Vickers' shareholders that voted down the deal. The biggest shareholder with 40% is Singapore Technologies, which is said to want to develop Vickers into a regional financial powerhouse and approved the deal. The other major shareholder, with 12.30%, is Citicorp Securities, part of Citigroup, the worlds' largest financial institution.

Citicorp controversially abstained from voting in the shareholder's meeting to approve the merger, denying Vickers of the 75% shareholder approval for such a move to go through. This was despite approving the merger in the Vickers' boardroom.

It has never been fully revealed exactly why Citicorp abstained from approving the last merger, and it is unclear as to whether it wants Vickers to merge this time. Its opposition last time could have been down to valuation, it could have been down to competition. Citicorp executives would not reply to questions on the matter. But seeing that Citicorp's investment banking subsidiary Salomon Smith Barney was only recently given full membership of the Singapore Exchange, it can now compete fully with Vickers on the local Singapore market. As a merged Vickers would be a stronger Vickers, it will be fascinating to see what Citicorp decides to do.

Singapore's brokerages face difficult times. Since deregulation last October, new foreign brokers have been admitted to the exchange, internet broking has taken hold, and volumes on the exchange have been particularly thin. However, according to one local financial institutions analyst, commissions have not noticeably come down and this has prevented a wholesale collapse of the local stockbroking industry.

Nevertheless, one local firm, Summit Securities, has already closed up shop, and analysts predict that the overall consolidation can only continue.