Chinese brokers flock to capital markets

China’s brokers are rapidly raising capital for margin financing but analysts warn of dilution and regulatory scrutiny.

Chinese brokers flock to capital markets

Citic Securities’ $4.5 billion and Haitong Securities’ $3.9 billion share placements underscore Chinese brokers’ growing need for capital to finance their rapidly expanding margin lending businesses.

However, investors should not be too optimistic in the stocks from a short-term perspective as the stock sales will dilute shareholders. In a longer term, the companies could improve the profits if they leverage the proceeds for margin financing and securities lending, said analysts. 


FinanceAsia has updated its subscription model. Registered readers now have the opportunity to read five articles from our award-winning website for free. Please subscribe for unlimited access.

Print Edition

FinanceAsia Print Edition