Chinese brokers challenging Wall Street counterparts

Citic Securities is the fastest-growing brokerage in the world thanks to China’s booming stock market, the Shanghai Securities News reported, and Wall Street is now beginning to regard it as a viable challenger to its top three brokers – Goldman Sachs Group, Morgan Stanley, and Merrill Lynch. Founded 11 years ago, Citic has a market capitalization of US$40.7 billion, US$8.8 billion more than Lehman Brothers, making it the fourth largest broker by market capitalization. When global banks with securities arms are added, Citic ranks number eight on a list that includes Citigroup, JPMorgan Chase, UBS and Credit Suisse. “Chinese companies will keep growing as investors pour their US$2.2 trillion in savings into stocks,” said an analyst who helps manage US$15 billion at DBS Asset Management in Singapore. “While Chinese brokers only run at home for now, their rise has already shaken up the list of the world’s largest brokers by market capitalization.” A year ago, Wall Street firms occupied the top five positions while China had none among the top 10. Surging up the global rankings alongside Citic is China’s second largest brokerage, Haitong Securities, which has a market capitalization of US$22.1 billion, eclipsing Bear Stearns as the world’s eighth largest brokerage firm. Investors in China have opened 46 million stock trading accounts this year, bringing the total number to 125 million. The market values of China’s four listed brokers – Citic, Haitong, Hong Yuan, and Northeast – have soared 526% on average so far this year. The booming stock market has seen China’s top commercial bank, ICBC, overtake Citigroup as the world’s largest bank by market value.