H1 Net Profits for Brokerages Fall 33.1%

China's securities firms reported a 33.1 percent year-on-year decline in net profit for the first half of this year due to weak stock markets.

The decline was the worst since 2007, according to financial reports released by 57 securities companies.

Of the 57 companies, only nine brokerages witnessed positive growth in net profit for the first half of 2010. Among the 48 brokerages with negative growth, four posted losses in net profit.

Amid a downswing in A-share stock markets in the first half, securities firms saw the heaviest losses. Against the 27.51 percent drop of the Shanghai-Shenzhen 300 Index, the weighted capital stock of the securities section slumped by an average of 47.01 percent.

The ratio of commission revenues to total revenues was 0.10 percent, down from 0.12 percent in 2009, according to the Securities Association of China.

Among the brokerages which issued their semiannual reports, Haitong Securities posted the highest sales revenue at 3.36 billion yuan. Guotai Junan came second with 3.42 billion yuan in revenue, followed by China Galaxy with 3.20 billion yuan. In terms of net profit, Haitong reaped the largest gains at 1.77 billion yuan, followed by Guotai Junan at 1.40 billion yuan, and China Galaxy at 1.37 billion yuan.

This year, China has seen an unprecedented wave of initial public offerings. As of June 30, 178 companies launched IPOs and raised a total of 213.2 billion yuan. Seventy-one other listed companies raised 193.4 billion yuan, among which 1.38 billion yuan came from additional share issuances and 55 billion yuan from rights issuances.

The colossal volume of new shares issuances brought in huge underwriting commission fees for securities companies. In the first half, underwriting income reached 7.25 billion yuan.