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Profit soars 85pc as brokers ride market boom

Hong Kong brokerage houses recorded a strong 85 per cent quarterly profit growth in the third quarter, thanks to strong market turnover, according to a report released by the Securities and Futures Commission yesterday.

The roughly 430 stockbrokers in Hong Kong made a combined profit of HK$12.08 billion in the three months ended September, up 85 per cent over the previous quarter.

The biggest winners during the quarter were the large players, category A brokers, with the 14 largest having a combined profit of HK$4.5 billion, up 114 per cent from the previous quarter.

The 51 medium-sized brokers recorded a total profit of HK$5.2 billion for the quarter as at the end of September, up 78 per cent over the previous quarter.

Category C brokers reported a combined profit of HK$2.3 billion during the quarter under review, up 58 per cent over the last quarter.

Hong Kong Stockbrokers Association chairman Kenny Lee Yiu-sun said the result was not a surprise as market turnover reached between HK$100 billion and HK$200 billion a day during the three months to the end of September, up 50 per cent over the second quarter.

The rise was mainly due to the State Administration of Foreign Exchange's August announcement of a proposed 'through-train programme' which would allow mainlanders who have accounts in the Bank of China's Tianjin branch to invest directly in Hong Kong stocks, giving a boost to the Hong Kong market.

'On a high turnover day, the total commission income for the whole industry [was] as high as HK$800 million a day based on a commission rate of about 0.25 per cent,' Mr Lee said.

But he also warned of challenges ahead as the through-train programme would be delayed until next year and market turnover in the fourth quarter has dropped.

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