Securities Firms’ Earnings Torpedoed by Pledged-Share Crisis
The plunge in Chinese stocks this year and the pledged shares crisis that’s engulfed the market have contributed to a deepening slump in profits at the country’s listed securities firms.
Combined net profits of the country’s 31 publicly traded brokerages dropped by 33% year-on-year in the first nine months of 2018 to 47.3 billion yuan ($6.9 billion), according to data compiled by Shanghai-based securities research firm SWS Research. Analysts at UBS AG put the drop at 35.1% and said that the slump for the third quarter alone was 51% year-on-year.
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