CITIC Securities (SHA: 600030), China’s largest investment bank, reported net earnings of 3.52 billion yuan ($550 mln) for the third quarter of the year, a 54 per cent improvement on the year, the company said in a regulatory filing.
This growth rate is slower when compared to previous quarters. The chaos that gripped the Chinese stock markets after June were the main cause of the slower growth rates. After a sharp decline in new IPO filings during the summer months, the niche market picked up some speed, benefiting companies like CITIC.
In addition the rampant volatility on the country’s stock market has boosted revenues from commissions, a trend which is likely to persist in the coming months.
Economy slowdown felt
For the first nine months of the year, CITIC said it booked profits totaling 16 billion yuan, a whopping 151.2 per cent annual increase, which was driven by the then-blooming stock market. However, the growth of the Chinese economy is slowing down, with the central bank cutting interest rates several times since the start of the year in a bid to counter the slack in economic activity.
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Manufacturing index readings for the last few months, compiled by the China Academy of New Supply-Side Economics and Minsheng Banking Corp, reveal a contraction, reaching 43 points in September. Any reading below 50 is considered a contraction.
CITIC Securities is part of the CITIC (HKG:0267) conglomerate, which comprises companies specializing in sectors ranging from commodities, energy, engineering and manufacturing, to financial services, telecoms, and real estate.
Back in January, Finance Magnates reported that the unit has also purchased Hong Kong listed forex and CFDs brokerage KVB Kunlun.
The financial services division of the group comprises CITIC Securities along with CITIC Bank, which earlier this week reported a 2 per cent increase in net profits for the first nine months of 2015 to 32.9 billion yuan, CITIC Trust, and CITIC Prudential.