Beijing's propping up of the stock markets has failed to revive trading turnover, which is down more than a third on the mainland and in Hong Kong, hurting stockbrokers' income and share prices. The Shanghai Composite Index climbed above 4,000 points last week for the first time in three weeks, with many crediting rescue measures introduced by Beijing since July 4 for stabilising the mainland market. But the average daily turnover in Hong Kong has dropped below HK$100 billion since July 16 and stood at about HK$80 billion last week, down 70 per cent from its April 9 peak of HK$293.91 billion at the start of a rally that took the Hong Kong and mainland markets to seven-year highs. Last week's average turnover was also 36 per cent lower than the HK$125.34 billion average for the first half of the year. Mainland markets have shared a similar fate, with turnover in Shanghai last week averaging about 650 billion yuan (HK$822.56 billion), 50 per cent down on its June 8 peak of 1.312 trillion yuan and down 32 per cent from the June average of 952.3 billion yuan. Turnover in Shenzhen dropped to just 247 billion yuan on July 10 when up to 60 per cent of the companies listed there suspended trading of their shares. About 20 per cent remained suspended last week, with daily turnover rising to about 600 billion yuan, still just half the May 28 peak of 1.205 trillion yuan. Hong Kong Securities Association chairman Jeffrey Chan Lap-tak said turnover was likely to remain low. Chan said investors understood that the improvement in share prices was due to the rescue measures implemented by Beijing and lacked fundamental support. "Investors also worry that the mainland authorities, having tried so hard to rescue the markets, have shown the economic situation may be really bad," he said. "They also worry about the [impending] US interest rate rise. "These have led investors to take a wait-and-see approach and led to low turnover." Chan also said mainland investors now accounted for a lot of trading in Hong Kong and as Beijing had clamped down on shadow banking and illegal margin finance, it had dried up liquidity and hurt market turnover here. Market operator Hong Kong Exchanges and Clearing has been a major victim of declining turnover as trading fees and other turnover-related fees are its major source of income. Its share price closed at HK$220 on Friday, down 29 per cent from its May 26 peak of HK$309.40. Credit Suisse analyst Arjan van Veen said "downside risk exists to the current HKEx share price given HKEx volumes have slowed significantly in the past week following recent market turbulence". As part of Beijing's rescue measures, the Shanghai Stock Exchange will reduce its trading fees by 30 per cent starting from August 1. Van Veen said that would also affect HKEx's revenue because the two bourses shared fee income on trading through the Shanghai-Hong Kong Stock Connect scheme. Credit Suisse has left its target price for HKEx unchanged at HK$188, on the assumption that daily turnover would average HK$125 billion. Commission income for the city's 500 stockbrokers has also been hit hard as turnover has plunged, and there is a lot less talk about and enthusiasm for takeovers of local brokerages than during the bull run from April to June. Shanghai-listed Everbright Securities last month completed its HK$4.1 billion purchase of 70 per cent of Sun Hung Kai Financial. "As the stock market turnover has slowed down recently, buyers have not been too aggressive to making bids," Sun Hung Kai Financial executive director Joseph Tong Tang said. "There's still some talk of mergers and acquisitions in the local brokerage industry but it would be hard to seal a deal. "The buyers are reluctant to pay a high price in light of the lower market turnover, while the sellers want to wait for the market turnover to bounce back in order to sell at a higher price. "I believe there will be few takeovers going on as market turnover is likely to stay low for three to four months. "China has not yet revealed plans for the unwinding of its rescue measures and no one knows how the market will respond once the props are removed. "Foreign investors are also reluctant to buy in the mainland markets amid the market intervention. "We are going to see all three stock markets in Hong Kong and on the mainland have thin turnovers for some time."