Stocks News
- Trading boom boosts Guotai Junan profit
Date: 20-Jul-2007 Sources: (Shenzhen Daily)
GUOTAI Junan Securities Co., China's second-largest brokerage by assets, posted Thursday a fivefold gain in profit in the first half of this year, boosted by a rise in trading volumes in a booming stock market.
Net income at the Shanghai-based brokerage rose to 3.92 billion yuan (US$518 million), from 702 million yuan a year earlier. Guotai Junan made 4.73 billion yuan, or 71 percent of its revenue, from selling and buying stocks for clients.
Domestic brokerages have benefited from a surge in trading during a two-year rally in stocks that has generated more funds to hire bankers, open branches and offer more products. Guotai Junan's first-half profit surpasses that of rivals including GF Securities Co.'s 3.14 billion yuan and Shenyin & Wanguo Securities Co.'s 2.98 billion yuan.
'The earnings of the big brokerages will remain relatively strong over the next few years,'' said Leo Gao, who helps oversee the equivalent of US$2.3 billion at APS Asset Management Ltd. in Shanghai.
The brokerage is also preparing to grab market share when the government introduces stock-index futures and short-selling, said Jin Yi, the investment bank's spokeswoman. She couldn't immediately confirm the earnings figures.
The benchmark CSI 300 index has gained 87 percent this year, making it the world's second-best performer after the Shenzhen Composite Index.
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 the China Securities Depository and Clearing Corp.
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