China’s Largest Brokerage CITIC Reports 58% Rise in Q1 Profit

The biggest brokerage in China, CITIC Securities Co Ltd, has managed to achieve a 58 percent rise in profit for the first quarter of 2019 this Monday, according to a report from Reuters.

Specifically, the Chinese broker said that its net profit for January through to March rose to 4.26 billion yuan ($633 million). When measuring this against the first quarter of the previous year, which reported a net profit of 2.69 billion yuan, this is higher by 58.36 percent.

During the first quarter, investment income reached 4.6 billion yuan, jumping by nearly 19 times from 231.57 million yuan a year earlier. One of the key driving factors for the solid performance was thanks to investment returns surging as Chinese stock markets experienced a rally.

So far this year, China’s blue-chip CSI300 share index has increased by approximately 30 percent. Following the same trend, according to data from Refinitiv, the benchmark Shanghai Composite index hit its highest close in almost 13 months in April.

The results announced today is welcome news, as the China-based firm announced an 18 percent drop in net profit for 2018 last month. This was largely due to a weak domestic stock market.

However, the first quarter wasn’t completely blue skies and sunshine for the broker, as its net fee and commission income declined by 3 percent, hitting 4.34 billion yuan.

The first-quarter results of CITIC coincide with optimism surrounding China’s economy, as analysts suggest that the world’s second-largest economy might be stabilizing, after noting its most sluggish growth in almost 30 years.

China Continues to Open Financial Markets

Furthermore, China has shown its ambition to open its financial markets to foreign investors further. As Finance Magnates reported in March, Nomura and JPMorgan managed to secure regulatory approval from the China Securities Regulatory Commission (CSRC) to set up joint brokerage ventures in the country.

At the same time, the regulator announced at a conference in Beijing that it would implement a national policy that would further open up the Chinese financial market to foreign firms.