Latest News:  
Beijing   Cloudy/Sunny    29 / 16 ℃  City Forecast

Home>>China Business

Don’t hate the trader, hate the securities game

By Zhou Junsheng (Global Times)

07:55, June 15, 2012

Effective June 1, stock transfer fees charged on the brokerages will be reduced by 25 percent, the China Securities Regulatory Commission (CSRC) announced recently.

Since it is a well-known fact that traders pass on their fees from exchanges to investors, regulators are hoping that a cut in trading costs will trickle down to the capital market. Unfortunately, this may be nothing more than wishful thinking, as nearly 90 percent of traders have intimated that they will not be scaling back fees for investors, according to local media reports.

Yet, it is not entirely fair to criticize traders for "misappropriating" benefits aimed at investors, given conditions at the country's securities market.

For one thing, with the nation's securities markets in the doldrums, capital has naturally retreated from stocks. During the first five months of this year, stock traders earned 29 billion yuan ($4.55 billion) from investors, down 32.7 percent from the same period last year, according to figures from Wind, a financial data provider. Meanwhile, the benchmark Shanghai Composite Index has fallen 19.14 percent over the past 12 months, according to figures from the exchange.

As private capital holders flee from stock positions due to market volatility, traders are witnessing their clients and the revenues they provide vanish.

At the same time, stock traders have seen their numbers surge at the nation's bourses in recent years, increasing from 3,000 in 2008 to more than 5,000 currently. As more traders enter the market, the harder they have to work to tap into an increasingly dwindling pool of investors.

Of course, despite the good intentions that may have motivated the impending trading fee discount, the CSRC is not entirely blameless in this matter either. Although it receives financial support from the government - as it rightly should, given the importance of its regulatory role - the CSRC also levies annual membership fees on traders and takes a cut of their commissions.

Relying on its administrative powers, the regulator has established these fees and other related charges without public hearings, which has aroused concerns among traders that more fees could soon be in the works.

Under these circumstances, many securities firms have been pushed into the red, leaving them with few incentives to reduce charges on investors. With their financial burdens mounting in an ever more competitive market, one can hardly blame traders from relinquishing their hold on one of their few dependable sources of revenue.

Email|Print|Comments(Editor:厉振羽、张洪宇)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Joint-actual-troop-deducing completed

  2. Gov't subsidize farmers to reduce air pollution for burning straw

  3. Love in Jiuquan Satellite Launch Center

  4. Seven nutritious foods

Most Popular

Opinions

  1. Master intl rules to solve trade disputes
  2. Investment banks ready to stand on own two feet
  3. China unlikely to undergo local govt debt crisis
  4. Plan to buy Diaoyu Islands a political farce
  5. Beijing Summit features five new aspects
  6. China’s courier industry primed for an overhaul
  7. Why China, US argue over PM2.5 data
  8. People's Daily Commentaries
  9. Nation needs private capital for resource demand
  10. Int'l board could give local stocks a run for money

What's happening in China

Antiques of Qin Dynasty to be exhibited in HK

  1. Power shortages set to ease
  2. Buddhist monk convicted of murder
  3. Coal stocks hit record, easing summer crunch
  4. Left-behind kids have 'dream house'
  5. Childless elderly arrange own funeral services

China Features

  1. Eight systems of Shenzhou-9 manned spacecraft
  2. The thousand-year-old Tibetan paper
  3. Beijing Summit features five new aspects
  4. A visit to Qiang Nationality in S.W. China
  5. 2012 West Lake Lotus Expo kicks off in Hangzhou

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai