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Chinese securities firms eat international investment banks’ lunch

Chinese securities firms are the only type of investment bank to be doing well in China this year. 2015 has been tumultuous – in the first half a stock market surge that prompted a flurry of investment banking activity (primarily IPOs) and the second a steep plunge that has threatened to derail a positive year.

Latest stats from research firm Dealogic shows that 2015 is far from a write off. Year-to-date in terms of China investment banking revenue, all of the top five banks are local securities firms.

Top the ranking is CITIC Securities – dubbed as China’s ‘Goldman Sachs’, which has long been top of the pile among local firms. It was ranked number three at this point in 2014, and rose to top by more than doubling its revenues this year, from $111m to $231m.

But China Merchants Securities made the gigantic leap: from 21st last year to third in 2015. Its revenue this time last year stood at $42m, but it has raked in $133m so far this year. That is more than threefold. According to media analysis of its latest half-year results which was released earlier this week, this explosive growth is mostly down to revenues from its prop trading (up 290%) and brokerage (up 478%).

 

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