Brokerage Shares Plunge as Investors Fret Over Earnings
Shares of listed Chinese brokerages are plunging as the sinking stock market and falling trading volumes threaten to hurt their profits and potentially expose them to losses on billions of yuan of equities pledged as collateral by customers.
Of the 39 listed securities firms, 25 saw their prices slump by the 10% daily limit or close to it on Thursday. Soochow Securities, a small Shanghai-listed brokerage fell by the maximum 10%, while Guosen Securities, which trades on the Shenzhen exchange, fell by 9%. Larger firms escaped the worst of the rout, although Citic Securities, a state-owned brokerage that's the country's largest, dropped by 6.1%, and Huatai Securities dipped 5.6%. But that was only marginally worse than the benchmark Shanghai Composite Index which sank by 5.2% on Thursday following an overnight sell-off in the U.S. stock market.
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