Brokerages’ earnings grow slowly
Print Edition
EARNINGS of China’s listed brokerages grew more slowly in January after the securities watchdog increased efforts to regulate risky margin trading.
The combined revenue of 16 listed brokerages that have disclosed their latest earnings results surged 140 percent year on year to 13.7 billion yuan (US$2.2 billion) in January, based on a calculation by the China Securities Journal.
Their profits soared 211 percent from a year earlier to 6.46 billion yuan.
However, the increase in revenue was actually 19 percent down from a month earlier, and the month-on-month growth in total profits eased to 9.3 percent from around 35 percent in December. The slowdown came as China’s stock market cooled, with the Shanghai Composite Index off 0.75 percent in January, a sharp drop from a 21 percent surge in December.
Trading turnover also eased in line with the falling market, squeezing commission income, one of the brokerages’ major revenue sources.
Data from Wind Information Co showed turnover in the A-share market averaged 635.7 billion yuan per day in January, down 19 percent from a month earlier.
“The growth of margin trading and short selling business also slowed significantly in January due to stricter regulation and the stock market decline,” Zeng Sufen, analyst with Industrial Securities, said yesterday.
By the end of January, the total outstanding margin trading and short selling balances rose 10.35 percent, compared with December’s growth of 24 percent, to 1.13 trillion yuan.
China’s securities regulator last month penalized several brokerages for violating rules on risky margin trading.
CITIC Securities was the most profitable with 1.04 billion yuan, up 319 percent from a year earlier. Haitong Securities was next with 970 million yuan, followed by China Merchants Securities with 740 million yuan.
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