Brokers post rising profit
Updated: 2007-07-19 12:50
GF Securities Co, China's fifth-largest brokerage, and BOC International (China) Ltd posted soaring first-half profits yesterday, buoyed by rising stock market trading.
Net income at GF Securities rose to 3.14 billion yuan (US$415 million) from 267 million yuan a year earlier, according to documents seen by Bloomberg News. BOC International, Bank of China's brokerage arm, boosted profit to 571.2 million yuan from 218.8 million yuan.
China's brokerages have bounced back from losses in 2005 as a two-year stock market rally spurred trading. An 86-percent gain in the benchmark index this year and US$19 billion of share sales have combined to more than double the size of the nation's stock market to US$2.3 trillion, according to data compiled by Bloomberg.
"The booming stock market has led to rising profits at brokerages, but it's difficult to say whether they can maintain the trend," said Liang Jing, an analyst at Guotai Jun'an Securities Co in Shanghai.
GF Securities earned 4.09 billion yuan in fees from selling and buying shares for clients, about 69 percent of its revenue in the first six months of this year. BOCI made 976.6 million yuan in brokerage fees in the first half, or 67 percent of revenue.
Chinese households, encouraged by low returns on bank accounts, are pouring money into the stock market.
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