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Brokerages suffer 69% fall in January revenue
By Lydia Chen |
February 16, 2011, Wednesday
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Online Edition
Online Edition
CHINESE brokerages suffered sharp cutbacks both in revenue and net profits in January due to sluggish markets that made investors reluctant to participate in.
Total revenue for all the 15 mainland brokerages plunged by 69.18 percent in January from a month earlier to 3.73 billion yuan (US$567 million) while net earnings saw a month-on-month fall of nearly 77 percent to about 1.2 billion yuan.
The rapid tumble was partly due to weak stock performances that led to smaller trading turnover in the markets, leaving brokerages little room for profits, analysts at Haitong Securities told Securities Daily.
The Shanghai Composite Index extended a loss of 0.62 percent in January, following a 14.3 percent dive last year. The CSI 300 lost 1.65 percent while SSE SME Composite Index suffered a decrease of 9.49 percent during the same period.
Average daily turnover dropped to 172.38 billion yuan in January, a shrink of 20 percent from December.
Haitong Securities ranked the best among its peers with a 43.88 percent decrease in monthly revenue and an 8.11 percent slide in net profits from December. Beijing-based CITIC Securities Co was at the bottom with revenue diving to 174 million yuan and profits at merely 4.22 million yuan.
But things would change for better in the rest of this year as analysts assured.
Today's news reports said China Securities Regulatory Commission was considering giving green lights to selected brokerages to launch private equity funds as early as this year.
This unprecedented move will offer brokerages more opportunities to make money, according to Reuters.
Besides, possible launches of the International board, margin financing and securities lending as well as expansion of the burgeoning over-the-counter board are expected to raise the annual revenue of brokerages by 20 percent, according to Guotai Jun'an Securities Co.
Total revenue for all the 15 mainland brokerages plunged by 69.18 percent in January from a month earlier to 3.73 billion yuan (US$567 million) while net earnings saw a month-on-month fall of nearly 77 percent to about 1.2 billion yuan.
The rapid tumble was partly due to weak stock performances that led to smaller trading turnover in the markets, leaving brokerages little room for profits, analysts at Haitong Securities told Securities Daily.
The Shanghai Composite Index extended a loss of 0.62 percent in January, following a 14.3 percent dive last year. The CSI 300 lost 1.65 percent while SSE SME Composite Index suffered a decrease of 9.49 percent during the same period.
Average daily turnover dropped to 172.38 billion yuan in January, a shrink of 20 percent from December.
Haitong Securities ranked the best among its peers with a 43.88 percent decrease in monthly revenue and an 8.11 percent slide in net profits from December. Beijing-based CITIC Securities Co was at the bottom with revenue diving to 174 million yuan and profits at merely 4.22 million yuan.
But things would change for better in the rest of this year as analysts assured.
Today's news reports said China Securities Regulatory Commission was considering giving green lights to selected brokerages to launch private equity funds as early as this year.
This unprecedented move will offer brokerages more opportunities to make money, according to Reuters.
Besides, possible launches of the International board, margin financing and securities lending as well as expansion of the burgeoning over-the-counter board are expected to raise the annual revenue of brokerages by 20 percent, according to Guotai Jun'an Securities Co.
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