China’s securities regulator said that it was studying a proposal to let banks apply for brokerage licenses, according to reports. The regulator did not give any timetable for the decision.
According to market analysts, the larger banks with their strong retail customer base could take business from the existing brokerage companies, and put a pressure on the commission rates.
“We see downside for Chinese brokers due to various changes in the regulatory environment and industry dynamics,” BlackRock said in its weekly market commentary.
“For example, the CSRC [China Securities Regulatory Commission] is likely to approve brokerage licenses for large banks which would potentially put downward pressure on fee structures.”
Major Chinese brokerage companies such as Citic Securities and Haitong Securities took a hit on their share prices following the announcement.
In early January, Chinese brokerage firms were in the news when the regulator suspended Citic and Haitong from lending money and stocks to new clients for three months.
China growth and policy easing
Meanwhile, BlackRock said it expects further monetary easing steps from the government after the country set its annual GDP growth target to roughly 7%, which, if met, would be the lowest growth rate for the country over the past 24 years.
“We expect further monetary easing, but emphasise the importance of improving fundamentals. Should this easing not have any positive impact on macro data, investors are likely to become increasingly concerned about the state of the economy.”
According to FE Analytics, here is the list of funds, registered for sale in Singapore, with exposure to Haitong Securities:
|
Fund |
% of net assets |
|
Fullerton – China A Share |
7.10 |
|
JPMorgan – China New Gen |
5.50 |
|
Allianz – China A-Shares |
5.45 |
|
iShares – CSI Financials Index |
4.69 |
|
JPMorgan – China Pioneer |
4.10 |
|
iShares – FTSE A50 China Index |
3.47 |
|
DB X-Trackers – CSI300 UCITS ETF |
1.98 |
|
iShares – CSI 300 Index |
1.94 |
|
LionGlobal – SGD Income Plus |
0.91 |
And, here is a list of funds, registered for sale in Singapore, with exposure to Citic Securities:
|
Fund |
% of net assets |
|
Allianz – China A-Shares |
7.43 |
|
Templeton – China Opportunities |
7.10 |
|
iShares – CSI Financials Index |
6.39 |
|
iShares – FTSE A50 China Index |
6.32 |
|
JPMorgan – China New Gen – Sep 10 |
6.10 |
|
Fullerton – China A Share |
5.80 |
|
Lyxor – China A |
5.60 |
|
JPMorgan – China Pioneer |
5.20 |
|
DB X-Trackers – CSI300 UCITS ETF |
2.68 |
|
iShares – CSI 300 Index |
2.65 |
