Top Chinese brokerages way ahead of rivals at home, but global powerhouse status remains a distant dream
Companies such as Citic Securities have surged on a 6.6pc gain by the A-share benchmark but they are no match for the Morgan Stanleys of the world
China’s largest securities companies put their best foot forward in 2017, honing their credentials as professional wealth managers through efforts to cut reliance on income from brokerage fees. But the country’s very own “Morgan Stanley” and “Goldman Sachs” remains a far cry, given the A-share market’s slower-than-expected liberalisation.
The mainland’s largest listed securities companies, including Citic Securities, China International Capital Corporation (CICC), Haitong Securities and China Merchants Securities, reported profit growth last year, outshining smaller counterparts to ride a 6.6 per cent gain in the benchmark for A shares.
Profits at the top five A-share securities companies are expected to account for more than half of the total earnings by the 30 mainland-listed brokerages, according to research by Haitong Securities.
“The top securities companies are well on their way to growing bigger,” said Ivan Li, an asset manager with hedge fund Loyal Wealth Management. “Based on their capital bases, brand awareness and reputable professionals, the big brokerages will continue to have a big share of the market.”
In China, securities companies are known as brokerages, but their business scope encompasses brokering services, asset management, investment banking, proprietary trading and margin financing. And brokerage fee income used to represent about two-thirds of their overall business because of active trading in shares by mainland equity investors.