In the capital markets, the brokerage sector has always been an area of close attention for investors, and its performance and valuation are directly affected by market sentiment and trading activity. Historically, when market sentiment is high and trading volume increases, the brokerage sector has tended to benefit quickly and achieve rapid growth in revenue and profits. This phenomenon makes brokerage stocks show significant excess returns compared to ** in some cycles. However, this view of directly correlating trading volume with brokerage opportunities needs to be scrutinized more closely in the current market environment.
First of all, it should be pointed out that the diversification of the brokerage business has become the new normal for the development of the industry. From the dominance of the traditional brokerage business to the construction of a diversified business structure, the revenue** and growth momentum of the brokerage sector have undergone fundamental changes. Especially for the head brokerage and the more comprehensive brokerage, the proportion of the original brokerage business has dropped from 70% to about 20%, and the proportion of other businesses such as proprietary business and investment banking business has increased significantly.
This shift means that even in a less active market environment, brokerages still have the opportunity to diversify their business to grow their earnings. For example, proprietary business and investment banking business have become new engines of profit growth for brokers, and the performance of these businesses does not depend entirely on the volume and activity of the market.
For smaller brokerages with a high proportion of brokerage business, market activity does have a greater impact on their performance, as they have limited development in terms of business diversification. However, for the industry as a whole, the level of market trading activity is not the only determinant of the performance of brokers. With the adjustment and optimization of the business structure, the growth momentum of the brokerage sector tends to be more diversified and stable.
In addition, the development trend of the international ** industry also shows that the top brokerages are gradually reducing the correlation between their proprietary business and market trends. These brokerages are increasingly employing hedging strategies and non-directional investments to reduce the impact of market volatility on their proprietary businesses, resulting in more robust performance growth.
Therefore, when analyzing the investment opportunities in the brokerage sector, investors should pay more attention to the overall sentiment of the market, the changes in the pace of IPOs, and the optimization and adjustment of the brokerage's own business structure. Although the increase in market trading volume has a positive impact on the brokerage business of brokerages, its contribution to diversified businesses such as proprietary business and investment banking business cannot be ignored.
This article was first published in the interpretation of the financial outlet, if there is **, please indicate the source.