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'Negative' outlook for securities brokers in 2009

By Xu Shenglan (chinadaily.com.cn)
Updated: 2009-01-15 16:50

A leading domestic credit rating agency gave a "negative" rating for the outlook of China's securities brokers in 2009.

In a report released on Jan 13, China Chengxin International Credit Rating Co (CCXI) said the nagging market uncertainties will continue to cloud stock brokers' business prospects in the coming one or two years. What's more, the potential new businesses, such as margin financing and securities lending, are not expected to generate much profit anytime soon, the report said.

"Initial public offerings in 2009 will be affected by the securities market and government regulations," said Li Li, a senior analyst with CCXI.

The well capitalized brokers with a large client base are expected to do better than the smaller ones, the report said.

CCXI is a joint venture of China's first rating agency China Chengxin Credit Management Co Ltd and the US-based Moody's Corporation.