China market-rescue effort hurts brokerages more than it helps

Hong Kong

CHINA'S campaign to end its US$5 trillion equity rout is driving investors away from an unlikely corner of the stock market: the brokerage industry.

Instead of benefiting from government efforts to shore up the market, the Hong Kong-listed shares of Citic Securities Co, Haitong Securities Co and China Galaxy Securities Co have tumbled twice as fast as benchmark indexes since the beginning of July. Not only are brokerages being compelled to foot a portion of the rescue bill, they're also getting hit by a plunge in volumes as policymakers restrict speculative trading.