March 31 (Bloomberg) -- Citic Securities Co., China’s biggest brokerage by market value, said 2009 profit rose 23 percent as a stock market rally drove a recovery in trading.
Net income rose to 8.98 billion yuan ($1.3 billion), or 1.35 yuan a share, from 7.3 billion yuan, or 1.10 yuan a year earlier, the Beijing-based company said in a Shanghai Stock Exchange filing today.
China’s investors doubled stock trading to a daily average of 20.5 billion shares last year as the benchmark Shanghai Composite Index surged, boosting trading commissions for brokers. Citic Securities, which also benefited from the lifting of a moratorium on share sales, may be poised to win more business as regulators allow margin trading.
The company said on March 24 that it has started accepting margin trading applications from investors after gaining approval from the China Securities Regulatory Commission five days earlier.
Margin trading will allow brokerages to lend cash and shares to investors at an interest rate higher than the benchmark lending rate and profit from the interest margin. The Shanghai and Shenzhen Stock exchanges will begin trials for margin trading today.
Citic Securities earned 10.9 billion yuan from trading commissions, or about half of its total revenue, compared with 7.46 billion yuan a year earlier. It made 3.48 billion yuan from investments including proprietary trading in the period, down from 6.45 billion yuan. Revenue for 2009 rose 24 percent to 22 billion yuan.
The company’s shares rose as much as 2.3 percent and traded at 28.61 yuan as of 9:57 a.m. local time. The stock has declined 10 percent this year.
--Zhao Yidi and Luo Jun. Editors: James Gunsalus, Philip Lagerkranser
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