Despite an occasional spurt in turnover and share prices, stock-brokers are facing hard times in sharp contrast to the bumper years of yore.

Brokers and analysts have been evasive and shy in talking about the plight of their industry, but privately, they have been lamenting the loss of fat bonuses that they took for granted during the boom years.

But one thing they said they could count on was their jobs. American-style mass layoffs are rare in China's financial markets because of the low basic salaries of the employees. All they are going to lose are their perks, said an analyst at a major Beijing-based stockbrokerage. "Despite no salary cut so far, we do not expect fat bonus by the end of this year," he said.

The reason for such pessimism is obvious. The benchmark Shanghai Composite Index has plunged more than 50 percent from last October when the key index touched the historical high of 6214 points.

Of even greater relevance to the bottom line of the stockbrokerage companies and their star brokers and analysts, is the plunge in turnover.

The daily average turnover of A shares in both Shanghai and Shenzhen bourses in May totaled 138.8 billion yuan, down 56.4 percent from the same period of the previous year, and 28.3 percent from January.

A stockbroker working at Haitong Securities told China Daily they have not yet been informed of any salary trim or position cut, but said: "our company has cancelled the new recruitment plan because the shrinking market turnover is exerting a negative impact on company earnings and new recruitment may burden the company."

Securities experts said an overwhelming proportion of income by securities companies, medium and small companies in particular, are stemming from their brokerage commission fees and earnings through investment.

According to fiscal data released in the annual report by securities companies in 2007, income from brokerage businesses accounted for more than 50 percent of the total revenue and their earnings by investing in capital markets accounted for 27 percent of the total.

"In the face of the systematic risks resulting from the sluggish stock market, securities companies who are showing heavy reliance on traditional brokerage business but are lacking in innovated businesses would be hit hard in the rest of the year," said Mao Nan, an analyst at Orient Securities.

(China Daily June 20, 2008)