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Securities brokerages suffering sharp drop in profits by ferujkll sdff
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Securities brokerages suffering sharp drop in profits |
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Business,Business News,Business Opportunities
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Securities traders in China are facing a continuing slump inprofits amid bearish market conditions, which will lead to arestructuring of the sector, insiders told the Global Timesyesterday. "The whole industry is facing a serious drop in profits due tothe emergence of the bear market last year," Wang Cheng, ananalyst at Shanghai-based Haitong Securities, told the Global Timesyesterday. Recent statistics from domestic financial intelligence serviceprovider Wind Information Co showed that in 2011, the 109securities trading companies in China had total operating revenueof 163.23 billion yuan ($25.82 billion), a drop of 21.07 percentyear-on-year. Their total net profit amounted to 45.6 billion yuan, down by 45.54percent year-on-year, and their total assets shrank by 20.3 percentyear-on-year.
Only six securities traders in the industry saw netprofit growth last year, and 18 made net losses, making it theworst year for the sector since 2004. The bear market was the direct reason for the profit drop,according to Wang. "Securities traders' investment in stocksbrought in very poor revenue last year. Also, very few investorsentered the stock market last year and the frequency of securitiestrading was much less than normal, which created a big problem forsecurities traders' brokerage services," Wang said. By December 27, 2011, the Shenzhen Stock Exchange Component Indexwas down by 30.08 percent, and the SME (small and medium-sizedenterprise) index and GEM (growth enterprise market) index both sawfalls of more than 30 percent.
The Shanghai Stock ExchangeComposite Index also dropped by 22.86 percent last year. "The industry is undergoing a restructuring. Business isgradually concentrating with the big traders. Small traders mustlaunch new and diversified services in order to survive," JiaTao, a consultant at Shenzhen-based Essence Securities, told theGlobal Times. The top 10 securities brokers in terms of net profit were the samelast year as for 2010.
However, the top 10 traders took 68 percentof net profit in the industry last year, 17 percentage points morethan in 2010, according to Wind. "Currently, traders' services are all very similar. In orderto get more revenue this year, traders will have to launch morefinancing products to diversify their service catalog, such assecurities margin trading and futures trading," said LiuMeihui, investment manager at Shenzhen-based China MerchantsSecurities. I am an expert from Special Purpose Bags & Cases, usually analyzes all kind of industries situation, such as waist slimming belt , plastic tubing connector.
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