Profits soar at China brokerages on resumption of IPOs, diversification
SHANGHAI, July 10
SHANGHAI, July 10 (Reuters) - China's small brokerages posted soaring profits in the first half of the year with one doubling its year-on-year return, driven by the resumption of mainland initial public offerings and successfully adding new areas of business, according to preliminary half-year reports.
The country's listing hiatus, which began at the end of 2012, ended briefly at the start of the year, before another four-month long halt that ended in June. The lack of IPOs pushed many brokerages into other business areas to bolster earnings.
Guoyuan Securities Co Ltd, a small Chinese brokerage, more than doubled its half-year profit to 607 million yuan ($97.98 million) from the same period in 2013, it said in a statement posted on the Shenzhen stock exchange on Tuesday.
The profit jump was driven in part by Guoyuan aggressively expanding its securities margin trading business. Helped by regulatory changes, margin trading is becoming an increasingly popular business for China's brokerages.
Soochow Securities Co Ltd and Founder Securities Co Ltd, both smaller players, increased half-year profit by between 70 percent and 100 percent year-on-year, they said in statements posted on the Shanghai stock exchange.
Soochow said its profits were partly due to the resumption of IPOs, while Founder cited its credit and securities proprietary businesses as the drivers for its profit uptick.
($1 = 6.1951 Chinese yuan) (Reporting by Shanghai Newsroom; Editing by Matt Driskill)
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