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The bullish market: A broker's boon

(Chinadaily.com.cn)
Updated: 2007-07-10 16:35

Bourses in Shanghai and Shenzhen released the latest trading statistics on stocks, funds and warrants of their member brokers. The statistics show that major securities companies reaped a windfall from commission charges on transactions in the booming stock markets.

Securities analysts say that brokerage charges were currently the primary source of income for securities companies.

According to the statistics gathered by Wind Info, China Galaxy Securities, Guotai Jun'an Securities, and Shenyin Wanguo Securities rank top three in total transaction values in the first half of the year, reaching 3.69 trillion yuan (US$486 billion), 3.38 trillion yuan, and 2.72 trillion yuan respectively.

Statistics show there are 11 securities firms whose stock transaction value surpasses one trillion yuan in the past six months. Their combined transaction value of stocks totals 19 trillion yuan.

Special coverage:
Markets Watch

Related readings:
 Brokers see net income surge
 Mutual funds leap in 1st half, top US$198.4b
 Rules released to curb warrant speculation

Analysts predict the commission income of China Galaxy, Guotai Jun'an and Shenyin Wanguo will reach 4.56 billion yuan, 3.82 billion yuan and 3.49 billion yuan respectively, assuming their commissions levels are 15 percent of total transaction value. Companies like CITIC Securities and Huatai Securities, which hold stakes of other brokers, are also likely to enjoy considerable brokerage revenue.

Chinese stock markets witnessed astounding trading enthusiasm in the first half of the year, with total transaction value of stocks, mutual funds, and warrants climbing to 27.75 trillion yuan, five times last year's figure. Meanwhile, the transaction value of stocks totaled 23.72 trillion yuan in the first half of the year, six times the same period last year.

Nonetheless, with the stamp tax hike and structural corrections to the stock market, the transaction value is expected to drop before the end of the year. And if analysts are correct, so will the income of brokers.


(For more biz stories, please visit Industry Updates)



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