President Donald Trump said on Monday that China is ready to come back to the negotiating table and the two countries will start talking very seriously.Politicsread more
The escalating trade war between Washington and Beijing dominated discussions at the G-7 gathering in France.Politicsread more
The latest round of tariff announcements in the last few days means that by the end of the year, essentially all Chinese goods exported to the U.S. will be subject to duties.China Economyread more
Futures fell after Trump said the U.S. will raise tariffs on more than $500 billion worth of Chinese imports, increasing trade tensions.Marketsread more
As Washington and Beijing continue to up the ante in their protracted trade fight, the potential of a recession in the U.S. is now "the biggest concern," according to Standard...US Economyread more
Tensions stemming from the U.S.-China trade war escalated sharply over the last few days, with much happening as Asian markets were shut down for the weekend.China Economyread more
Clouding the G-7 gathering, which represents the world's major industrial economies, are the tit-for-tat tariffs between Washington and Beijing.Politicsread more
Neither the U.S. nor China wants to be seen as the party that derailed trade talks, says William Reinsch of Center for Strategic and International Studies.World Economyread more
China said Friday it will be resuming 25% duties on U.S. autos, and a further 5% on auto parts and components.Asia Marketsread more
World leaders, environmental groups and celebrities have publicly decried the vast swaths of forest being destroyed by the fires.World Newsread more
Education Minister Ong Ye Kung says the Singapore government has been preparing for the challenge of an aging workforce "for the past 20 years."Employmentread more
In the shoals of China's little-known stockbrokers, fast-growing firms like Southwest Securities may soon find themselves in the glare of a consolidation spree triggered by Beijing's drive to modernize the country's financial industry.
Nearly doubling profits last year on a stock market boom, Southwest is one of the more than 120 brokerages in China that will have to live with government plans to allow commercial banks and other finance firms to own a brokerage licence. The new rules are expected later in 2015, part of moves to open up capital markets and bolster China's sagging economic growth.
After a stellar 2014 - securities firms' profits more than doubled to $16 billion - Chinese brokerages are now bracing for the impact of newcomers by lining up to raise billions of dollars in funds to expand margin trading and other businesses. A series of takeovers is about to be unleashed, insiders say.
"Mergers between banks and securities companies, insurers and banks, or insurers and securities companies are all likely to show up," Wang Dongming, chairman of China's largest brokerage, CITIC Securities Co , said at a recent news conference. "The strong will become stronger, and the weak will become weaker."
Chinese securities firms had about 4.1 trillion yuan ($660 billion) of assets at the end of 2014, nearly double a year earlier, according to the Securities Association of China.
Brokers' assets and earnings were boosted by stock trading volumes rising to an all-time high in China last year as local investors flocked to equities after the central bank's surprise interest rate cut in November. Volumes have also been helped by the Stock Connect scheme, which opened the same month, allowing direct trading of Hong Kong and Shanghai stocks on each other's bourses.
While CITIC Securities and Haitong Securities are way out in front, with 192.9 billion and 129 billion yuan of assets respectively, most of the industry consists of much smaller players. Ranked 19th, Southwest has assets of about 30 billion yuan.
Two sources of big brokerage business will be affected by the broadening of the licences: equity underwriting, a hugely profitable business that pays nearly double the fees in mainland China compared with Hong Kong, where fees are squeezed by stiff competition from global brokerages; and stock trading, where the entry of new players is expected to push very tight commissions even lower.
Banks with brokerage licences would present "huge risks" to brokerages because of their large retail customer base, Credit Suisse analysts wrote in a March research note. That would further pressure stock trading commissions that fell to about 7 basis points in the second half of 2014 from 7.6 basis points in 2013 amid competition from brokers for business from retail clients.
China's securities regulator has given no timetable for when new licences would be issued. Hong Kong-based advisory firm REORIENT Financial Markets expects the change could be as soon as the third quarter of 2015.
The Hang Seng China H-Financials index has surged 39 percent in the past year, pushing valuations too high, according to some investors, potentially building pressure on brokerages if competition cuts into profit.
"The environment for the brokerage business in China is definitely more negative versus other players and other sectors in the financial space, specially considering the current valuation level," said Francois Perrin, head of Greater China equities at BNP Paribas Investment Partners Asia.