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BIZCHINA / Comments & Analysis

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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