Securities firms earnings soar in February

Taipei--Securities companies operating in Taiwan witnessed their net profits soaring in February on the back of a strong showing in the local equity market, as well as a significant increase in turnover, according to the Taiwan Stock Exchange (TWSE).

The TWSE, which runs the local main board, said that the aggregate net profit of 75 brokerages in Taiwan hit NT$3.35 billion (US$109 million), up more than 160 percent compared with January.

The improved bottom line reflected a booming local equity market, where the weighted index on the main board rose 302.52 points, or about 3.2 percent in February, due to heavy institutional buying at home and from abroad.

After the local bourse resumed after the six-day Lunar New Year holiday that ended Feb. 1, Taiwanese investors operating in China rushed to move their funds back home at a time when Chinese authorities strengthened its crackdown on tax evasion by foreign investors, market analysts said.

The Taiwanese investors rushed to enter the local equity market and buy, which boosted turnover on the main board, paving the way for higher earnings enjoyed by the local securities business, the analysts added.

The TWSE data shows that the average daily turnover on the main board in February jumped almost 50 percent from a month earlier to NT$104.6 billion.

In reflection of a significant leap in trading volume, the statistics indicate, fee income in stock-brokering business raked in by securities firms for February rose by NT$1.48 billion from a month earlier, the TWSE said.

In addition, earnings posted in proprietary trading operations for February also rose by NT$1.28 billion from January, the exchange said.

In February, a total of 64 securities houses were profitable, while 11 incurred losses, the TWSE data shows.

Among the 43 integrated securities companies, 40 were profitable in February, but three suffered losses, while among the 30 dedicated securities brokers, 23 posted net profits but seven recorded losses. In the month, one of the only two futures commission merchants posted earnings, with the other reporting losses.

In Taiwan, integrated securities firms are allowed to engage in a wide range of activities that include brokering trade, proprietary trading and underwriting, while dedicated securities brokers can only broker and engage in trade equities.

In the first two months of this year, securities firms in Taiwan posted NT$4.79 billion in net profit, up 277 percent from a year earlier, the TWSE said.

Source: Focus Taiwan News Channel