China’s securities firms suffer a miserable 2018 amid slumping stock market, but analysts expect a better year ahead
- The 27 main listed brokerages see combined net profit plunge 43 per cent as stock market slump, sluggish trading, and shrinking IPO business take a toll
China’s securities firms suffered a miserable 2018 as their core brokerage income fell sharply amid the world’s worst stock market decline, financial results showed.
But analysts anticipate a better year to come as the central bank’s widely-expected rate cuts to ease monetary conditions rejuvenate stock market trading. The possible launch of a new board for technology companies’ shares in Shanghai could also bring the sector new IPO business.
The 27 main listed securities firms had announced their initial financial results for December by Thursday morning.
Based on the initial numbers, their combined net profit for 2018 had fallen by 43 per cent to 57.3 billion yuan (US$8.45 billion). Total revenues from operations had dropped by a fifth to 200.8 billion yuan.
Their stock market performance was no better. The securities firms logged an average 23 per cent drop in share price in the past year.
“Business from the primary and secondary markets has shrunk, causing a sharp fall in the securities firms’ overall revenues and profit,” said Zuo Xinran, an analyst covering the non-bank financial sector at Founder Securities.
