Securities firms reported NT$30.58 billion (US$991.4 million) in pretax profit for the first 10 months of the year, a 12.99 percent decrease from the same period ast year, data released yesterday by the Taiwan Stock Exchange (TWSE) showed.
Market turnover jumped 35.4 percent to NT$27.61 trillion from a year earlier, with fee income for securities firms increasing NT$8.2 billion, or up 20.3 percent year-on-year, the TWSE said in a report.
However, securities companies saw combined profits from proprietary trading decrease by NT$15.8 billion, or down 88.41 percent from a year earlier, due to the decline in local shares last month, the report said.
Securities companies reported an annual decrease in profit from underwriting business of 43.75 percent to NT$2.88 billion, it said.
The decline in combined pretax profit stemmed from the plummet in local shares last month, a TWSE official surnamed Liu (劉) told the Taipei Times by telephone.
The TAIEX fell by 1,204.21 points, or a decline of 10.94 percent, from 11,006.34 on Oct.1 to 9,802.13 on Oct. 31, with average daily turnover falling 4.25 percent month-on-month to NT$121.7 billion, Liu said.
Last month alone, securities firms posted a combined loss of NT$1.36 billion, as losses in proprietary trading offset gains in fee income, TWSE data showed.
“No one expected the drastic decline in local shares last month,” which ate into cumulative profit for the year, Liu said, adding that brokerages had seen a 50 percent increase in combined profit in the first half.
The local share market showed a rarely seen “straight down” last month, with “investors worried about the escalating US-China trade war,” he said.
The 34 integrated securities firms — which are allowed to engage in brokering, proprietary trading and underwriting — reported NT$26.42 billion in pretax profit, down 13.79 percent annually, the report said.
Integrated firms accounted for 86.42 percent of the combined profit from the nation’s 54 brokerages, it said.
In contrast, eight securities firms that can only trade shares on behalf of clients saw a 5.83 percent growth in combined pretax profit for the year to last month, with increased turnover helping them earn more income from fees, their main revenue source, Liu said.
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