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Brokers lead index to decline
By Ye Zhen |
November 30, 2012, Friday
|
Print Edition
Print Edition
SHANGHAI stocks dipped for a fourth day yesterday to a fresh 46-month low, led by brokerages on talk commission fees may be cut.
The Shanghai Composite Index lost 0.51 percent to 1,963.49 points, the lowest close since January 16, 2009.
Brokers plummeted in the afternoon session after the 21st Century Business Herald reported the securities regulator may cut commissions on transactions by 20 percent.
The news renewed concerns over brokers' earnings that are already hurt by the light trading volume recently. "Brokerage commission is the primary source of revenue and the cut will further erode profitability," said Jufeng Investment Co.
The "stagnant IPO market" has also dented brokers' profitability, said Wang Huailiang, an analyst at Rising Securities.
Brokers' income from underwriting and sponsorship fees totaled just 5.4 billion yuan (US$870 million) so far this year, down sharply from 13 billion yuan in 2011 and 16.3 billion yuan in 2010, data from Wind Information Co showed.
Sinolink Securities fell by the daily limit of 10 percent to 13.14 yuan, and Industrial Securities shed 8.2 percent to 9.28 yuan. CITIC Securities, China's biggest listed broker, lost 4.4 percent to close at 9.80 yuan.
The Shanghai Composite Index lost 0.51 percent to 1,963.49 points, the lowest close since January 16, 2009.
Brokers plummeted in the afternoon session after the 21st Century Business Herald reported the securities regulator may cut commissions on transactions by 20 percent.
The news renewed concerns over brokers' earnings that are already hurt by the light trading volume recently. "Brokerage commission is the primary source of revenue and the cut will further erode profitability," said Jufeng Investment Co.
The "stagnant IPO market" has also dented brokers' profitability, said Wang Huailiang, an analyst at Rising Securities.
Brokers' income from underwriting and sponsorship fees totaled just 5.4 billion yuan (US$870 million) so far this year, down sharply from 13 billion yuan in 2011 and 16.3 billion yuan in 2010, data from Wind Information Co showed.
Sinolink Securities fell by the daily limit of 10 percent to 13.14 yuan, and Industrial Securities shed 8.2 percent to 9.28 yuan. CITIC Securities, China's biggest listed broker, lost 4.4 percent to close at 9.80 yuan.
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