Around 5 to 10 percent of the staff of the investment department of CITIC Securities - which has been one of the leading underwriting services providers involved in initial public offerings (IPOs) - will be laid off, National Business Daily reported on December 26.
"Many brokerage firms have started cutting labor costs, so it will be difficult for me to find a new job," Wei said.
The cutbacks are largely a result of the brokerage firms' poor business performance last year, especially since July, when the China Securities Regulatory Commission (CSRC), the capital market regulator, suspended approval of new IPOs in an effort to revive the sagging stock market.
The net profits of the country's 18 listed brokerage firms reached 14.79 billion yuan ($2.37 billion) in the first three quarters of 2012, down 6.46 percent compared with the same period of 2011, according to statistics from Wind Information Co, a financial information provider.
The brokerage firms underwrote a total of 44 IPOs in the first three quarters of 2012, a 31 percent decline year-on-year, and their total income through offering underwriting services reached 1.26 billion yuan, down 56 percent compared with the same period of 2011, according to Wind.
Companies queuing up
Although the CSRC restarted reviews of four IPO applications in September, over 800 enterprises are still queuing up for the regulator's review and approval procedures. Consequently, the investment departments of the brokerage firms have had much less underwriting business.
"The CSRC interfered with the market by slowing down IPO approvals in a bid to stabilize the faltering market, because an oversupply of new stocks in a sluggish market was partly a cause of the poor performance," Li Daxiao, director of research with Yingda Securities, a Shenzhen-based brokerage firm, told the Global Times.
Girl wearing "military uniform" parade on the street to publicize the new traffic regulation
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