150 futures companies' net profits in February increased by over 96% year-on-year

Wang Ning, Reporter

On March 30, the China Futures Association released data showing that in February this year, the 150 futures companies nationwide handled agency trading with a value of 5.5544 trillion yuan, an agency trading volume of 528 million lots, operating revenue of 3.171 billion yuan, and net profit of 980 million yuan. Among them, net profit increased 96.39% year on year.

In February this year, aside from total trading volume, the futures market’s total trading value and operating revenue also grew compared with the same period last year, rising 7.76% and 24.74% year on year, respectively.

Zhang Bao, vice president of Anliang Futures, told a reporter from The Securities Daily that in February, many year-on-year figures for the futures market showed a growth trend. This was mainly because market trading activity increased, driving growth in brokerage business revenue (including commission and interest income, etc.), resulting in higher operating revenue for futures companies. At this stage, some futures companies are accelerating their shift away from reliance on pass-through-type business, increasing their layout in areas such as asset management and risk management subsidiaries, improving the structure of futures companies’ operating revenue. At the same time, by using digitalized and intensive operations, they reduce labor and expense costs and improve the efficiency of fund utilization.

Wan Changwang, vice president of the marketing management headquarters of Minmetals Futures, told a reporter from The Securities Daily that since the beginning of this year, volatility in the prices of bulk commodities has intensified. The hedging and risk management needs of various types of traders have increased, which has sparked the enthusiasm of all kinds of market participants. Improving market activity has become the core support for futures companies’ higher net profits. Meanwhile, the structural opportunities shown in the equity market have thickened futures companies’ investment returns, jointly pushing up the industry’s overall profitability level.

At present, China’s futures market is entering a strategic development period, which is attributable to guidance from regulators. Regarding how to seize industry development opportunities, multiple interviewees believe that only by accelerating business transformation and development, and by building on a differentiated positioning, can futures companies stand out in fierce competition.

Wan Changwang said that in the face of the expansion of futures market scale and the upgrading of customer needs, futures companies should seize the opportunity presented by the surge in risk management demand from real-economy enterprises. They should transform from pass-through services to an “all-in-one” derivatives comprehensive service provider, and improve their professional service capabilities such as customized over-the-counter options. At the same time, they should strengthen technology enablement and improve operational efficiency—for example, by using big data to enhance risk control and investors’ suitability management levels.

Zhang Bao said that in the future, futures companies should strengthen their risk management subsidiaries and vigorously develop businesses such as over-the-counter derivatives. They should also expand their asset management and wealth management business to better meet individuals’ and institutions’ asset allocation needs. In addition, by going deep into industrial and institutional services, expanding core incremental business, and developing on the basis of differentiated positioning, they can form a competitive advantage.

(Editor: Wen Jing)

Keywords:

                                                            futures
                                                            futures company