Shanxi Securities made a strong listing debut yesterday amid high market expectations of brokerages gaining from a surging stock trade. Shares of the brokerage soared 70.1 per cent to 13.27 yuan (HK$15.40) on the SME board at the Shenzhen Stock Exchange yesterday, following Industrial Securities' first-day gain of 48.6 per cent on October 13 in Shanghai. The hefty jump surprised analysts who had said before the trading debut that a reasonable price for the company would be 9 yuan. 'Investors are becoming increasingly optimistic about brokerage stocks, believing their earnings will soar due to hot money inflow,' said Dazhong Insurance fund manager Wu Kan. 'But Shanxi Securities was obviously overvalued.' The brokerage floated 400 million shares at 7.8 yuan each in an initial public offering early this month, the 15th brokerage to list on the mainland's stock market. Analysts had called it overpriced, based on its fundamentals. The offer price was 30 times the firm's earnings last year. Mainland stock exchanges have seen an influx of speculative capital since September, providing a boost to brokerages. Nearly two-thirds of mainland brokerages' revenue is derived from fees. The securities regulator reportedly plans to set a minimum rate for brokerage trading fees to avoid cut-throat competition while shoring up the industry's profitability. Mainland brokerages suffered a market downturn in the first three quarters of this year. Citic Securities reported a net profit of 4 billion yuan between January and September, down 36 per cent from a year earlier. Talks of a strengthening yuan has attracted a huge capital inflow, with the Shanghai Composite Index jumping 15.5 per cent since September 30. Shanxi Securities' closing price yesterday represented 51 times earnings last year. On the Shenzhen exchange, average price-earnings ratio stood at 45 yesterday. Analysts predicted Shanxi Securities would post per-share earnings of 0.2 yuan for this year.