CHINA’S stock market turmoil will slow profit growth at the nation’s brokerages for the rest of this year and the next, after their first-half earnings outpaced the whole of last year on the back of what had seemed like an unstoppable market rally.

    Profits for China’s 22 listed brokerages, including CITIC Securities, GF Securities and Guotai Junan Securities, soared nearly 500 percent on average in the first half from a year earlier, according to the Securities Association of China (SAC), as higher trading volumes boosted fees and commissions.

    That is expected to moderate. Profits for listed brokerages on average are set to rise 87.5 percent this year and by about 28 percent in 2016, according to StarMine Professional estimates.

    A healthy stock broking industry has become important for the government, which this month called upon 21 of its biggest securities firms to support a plunging stock market after more than US$3 trillion in investor wealth was wiped away in a three-week rout that started in mid-June.

    “Most of the securities firms’ profits will decline or be adversely affected in the next two quarters,” said Chen Xingyu, an analyst at Phillip Securities in Shanghai.

    Many brokerages have released preliminary results for the first half. The combined profits of the nation’s 125 securities firms reached 153.2 billion yuan (US$24.7 billion) over that period, SAC figures showed, with only nine making a loss.

    In comparison, the brokers earned a cumulative 96.6 billion yuan in profit for all of 2014.

    The trigger for the profit jump was the start of a stock trading link between Shanghai and Hong Kong late last year, which drew hordes of domestic retail investors to equity markets. Volumes surged further as international investors followed suit.

    The CSI300 index more than doubled to a seven-year high by mid-June, clocking the best performance by a major global stock market over that period. But it subsequently lost as much as a third of its value in the market turmoil that has forced the government to offer emergency support measures. (SD-Agencies)