Brokers enjoy boom
(China Daily)Updated: 2006-12-27 11:06 SHANGHAI: Chinese brokerages, who have long suffered a stagnant market, will earn trade commissions of over 30 billion yuan (US$3.84 billion) this year as stock market turnover tripled, a report said yesterday.
Fees from underwriting public offerings of shares and convertible bonds and
private share placements will also soar this year, said a report jointly
prepared by Shanghai Securities News and domestic brokerage Guotai Jun'an
Securities.
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It said 105 domestic companies have raised a combined 202.33 billion yuan (US$25.88 billion) in 2006, including 139.76 billion yuan (US$17.88 billion) received by 67 companies through public offerings in the first 11 months, a local media report said.
This is a far cry from just a year ago, when many of the country's 100 or so brokerages were struggling following several years of slump in the country's stock market.
But the stock market has more than doubled its value this year, driven by a series of government measures to boost stocks, including a spate of A-share listings of key State-owned enterprises and a major expansion of the country's mutual fund industry.
According to the official data, the domestic brokerage industry made a profit of 12.3 billion yuan (US$1.55 billion) in the first half of this year, reversing losses in the past four years.
Foreign investment banks have long hoped to team up with Chinese brokerages
to tap the country's fledgling capital market. Goldman Sachs and UBS AG have
entered the industry, but more are left waiting as Beijing has so far only
allowed foreign participation on a piecemeal basis.
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