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Research on the Profit-making Mode of Securities Companies in China
The current article proceeds from the profit-making mode to analyze the full-scale deficit situation faced by the securities companies as the financial intermediaries after they have experienced several years’ brilliant development and tries to discuss and explore for the feasible profit-making mode for the securities companies in China.
With the ever-increasing prosperity of the capital market in China, securities companies gain stronger and stronger momentum in terms of their market position. However, many adverse factors impair the sustainable development of the securities companies, such as, the undiversified profit-making mode, the inadequate capital market and the rough-and-tumble internal management, all of which seem to be incompatible with the current profit-making mode of the securities companies in China. Consequently, many securities companies take the initiative to carve out their self-tailored profit-making mode whereas more other securities companies are still plunged into the abyss of despair due to the lack of the effective profit-making remedy, so the construction of the effective profit-making mode is an extremely urgent problem to be solved at present.
This article combines the theoretical analysis and exemplary demonstration in a bid to elaborate on the reasons for the malpractices exercised by the securities companies in China, the self-contained factors and the market environment factors. It is a prerequisite for the securities companies to seek the profit-making mode by changing themselves and improving the market environment. The growth experience of the securities companies in the mature market economies like the U.S. and some other developed countries clearly demonstrates that the innovative spirit fueled by the pioneering and aggressiveness is the soul of the modern investment banks and any securities company can not only follow the stereotyped profit-making mode all the way through to the end because the market environment keeps changing from time to time, so the profit-making mode should follow the trend for a ready change as required. The Chinese securities companies must adopt flexible measures to change their respective effective profit-making mode in accordance with the objective situations and the fresh scenarios and the transformation of the capital market at the present period so as to formulate their own near-term and long-term profit-making mode in accordance with their own current situations and the development trend of the future capital market. In sum, the profit-making mode represents the corporate strategy and it should be given priority in terms of the corporate development strategy, so the profit-making mode for the securities companies should be flexible and adaptable.
Based on the study of the profit-making mode of the securities companies in China, the current author arrives at such as conclusion: the profit-making mode represents a sharp-edged weapon to blaze the path for the prosperous development of the securities companies in China, so only when the securities companies establish their own distinct and efficiency-aware profit-making mode can they sustain themselves free from the adverse impact of the future market competition in terms of profit-making.
[ Last edited by andrewyan at 2006-9-21 11:12 AM ]