Stocks News
- GF, BOCI profits soar
Date: 19-Jul-2007 Sources: (Shenzhen Daily)
GF Securities Co., China's fifth-largest brokerage by assets, and BOC International (China) Ltd. (BOCI) posted yesterday soaring first-half profits, 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. BOC International, Bank of China's brokerage arm, boosted profit to 571.2 million yuan from 218.8 million yuan.
Domestic 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.
'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 Junan 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 negative inflation-adjusted returns on bank accounts, are pouring money from their US$2.2 trillion in savings into the stock market. An average 266,000 new trading accounts a day were opened in May, taking the total to 102 million.
The total value of share transactions swelled almost fivefold to 12 trillion yuan in May from 2.56 trillion yuan a year earlier, according to China Securities Depository and Clearing Corp. figures.
GF Securities has said it plans to take over Shenzhen-listed Yan Bian Highway Construction Shares Co. through a share swap to gain a stock market listing. The transaction has been held up by a legal dispute.
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