Stock brokers expected to realize 90b yuan of profits in 2009

Net profits of Chinese stock brokerage firms would reach 900 billion yuan this year, an increase of nearly 90 percent, Liang Jing, an industry analyst with Guotai Junan Securities Co., Ltd., said at a seminar yesterday.

She said that trading volume is still the main factor that drives profit growth, similar to the boom in 2007. This year's average daily trading volume has reached 222.9 billion yuan, up 96 percent year on year. There is no doubt that performance of the whole industry is on the road of rapid growth.

In the long run, the market scale will continue to expand and drive in scale is not over yet. China's low securitization ratio gives traditional business great chances for steady growth.

Margin trading and stock index futures will be the catalyst for the "second revolution" of the industry, said Liang. Margin trading and stock index futures business each will contribute 20 percent of net profits for the brokerage firms.

Brokers with leading capital size, high business competitiveness and strong innovative ability can benefit more from the introduction of margin trading and stock index futures, Liang noted.