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Industrial securities profit dives 32 by e55he swrzsnb
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Industrial securities profit dives 32 |
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Business,Business News,Business Opportunities
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Industrial Securities Co reported Tuesday a 32 percent drop in its net profit, which was attributable to its shareholders in 2010 due to shrinking commission revenues, the volatile stock market and intensifying competition in the industry. The brokerage firm had total revenues of 2.74 billion yuan ($417 million) and net profit attributable to shareholders of 787 million yuan ($120 million) in 2010, down 11 percent and 32 percent respectively compared with 2009, according to its annual report filed with the Shanghai Stock Exchange. The firm's stock price closed at 17.47 yuan ($2.66) Tuesday, down 3.43 percent.
Industrial Securities is one of the 17 stock brokerage firms listed on the A-share market, and the first to disclose its annual report 2010. With total transaction value of 1.36 trillion yuan ($207 billion) in 2009, the firm ranked 19th among 106 brokerage firms nationwide, according to statistics of the Securities Association of China. "The firm's declining revenues and net profit is consistent with the general trend of the industry," Huang Lijun, a financial analyst with Hong Yuan Securities, told the Global Times. He projects that most of the listed brokerage firms will report similar results for 2010. The stock market had greater volatility in 2010 compared with the previous year.
The Shanghai Composite Index plunged from 3,277 points in early 2010 to 2,808 points by end of last year, down 14.32 percent. In bad times, stock investors tend to reduce transaction volume, contributing less commission revenues to brokerage firms. As most brokers have little differentiation in their business structure, they tend to lower commission rates in order to attract potential customers, Zeng Qiang, a financial analyst with Shenzhen-based Gold State Securities, told the Global Times.
Brokerage commissions account for 56.7 percent of Industrial Securities' total revenue stream. The firm cut its commission rate to 0.062 percent, charging only 6.2 yuan ($0.94) for transaction value of 10,000 yuan ($1,522), much lower than the industry average of 0.087 percent, Huang said. Although the price discount helped the firm achieve larger market share from 1.42 percent in 2009 to 1.61 percent in 2010, overall commission revenue was only 1.24 billion yuan ($188.73 million) last year, down 27 percent year-on-year. The firm's investment revenue also declined by 2.5 percent in 2010 compared with 2009. Despite the overall decline in performance of the industry, some listed firms may be better off than others. Gold State Securities' Zeng named Hong Yuan Securities and Sinolink Securities for their strength in generating investment returns.
Compared with the traditional stock broking sector, future opportunities for brokerage firms will lie in new businesses such as margin trading, short selling and stock index futures launched last year in China, Zeng said.. I am China Manufacturers writer, reports some information about cable rca jack 3.5 , coax to rca connector.
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