Chinese brokerages are “bracing for more pain” because of the country’s disappointing economic recovery and a “brutal stock market sell-off could inflict further damage” on the 11-trillion-yuan (US$1.56 trillion) sector, according to a report by the South China Morning Post, which said a wave of downsizing, cost-cutting and shutdowns has rocked the sector over the past year.
Combined profits for listed brokerages dropped 34% in 2022, which reduced incomes and ate into investment returns, according to data from Kaiyuan Securities, the report said, adding that there were reports that medium-size brokerage Zhongtai Securities had shut its proprietary trading department following massive losses, plus fears that commission rates for investors like mutual funds could be cut in response to the State Council’s demand for brokerages and mutual funds to cut service fees further.
Read the full report: South China Morning Post.
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