The share prices of brokerages listed in Hong Kong and Shanghai fluctuated widely on Tuesday, after hitting record levels on Monday, on profit-taking from the ongoing rally.
Hong Kong-listed Emperor Capital Group Ltd's share price, for instance, almost doubled on Monday from HK$0.56 (7.2 cents) to HK$1.09, but it slumped 9.17 percent on Tuesday to HK$0.99. CITIC Securities Co sank 7.56 percent on Tuesday, after it had rallied 12.79 percent on Monday. And Hong Kong-listed Haitong Securities Co tumbled 11.97 percent after it had rocketed 16.01 percent on Monday.
Brokerage listings in Shanghai, on the other hand, soared 10 percent, the maximum allowed on the A-share market. Shanghai-listed Southwest Securities Co Ltd gained 10 percent to 14.03 yuan ($2.27) per share on Tuesday.
Analysts and market insiders blamed profit-taking after several days of rallies, adding that brokerages are one of the sectors that is most sensitive to changing market sentiment.
"As investors in the mainland are subject to daily price change limits of 10 percent, quite a few probably turned to Hong Kong-listed brokerage shares" to make a profit, said Liu Jie, an analyst at Xiangcai Securities Co Ltd.
Last Friday saw more than 1 trillion yuan of shares changing hands on the Shanghai and Shenzhen exchanges, the first time in A-shares' history, which was more than five times the average daily turnover in 2012.
Many retail investors complained that brokerage trading systems were delayed or even broke down in recent days at the height of trading.
"It took five minutes to fully load the trading page from my brokerage's system as I placed an order, and I missed the best price," said Li Yinju, a 52-year-old retail investor in Shanghai.
"Trading via smartphone may not be as smooth as using a computer in my brokerage's trading hall, so I moved into a VIP room－I have not been in one of these for ages as the market was previously so bearish," said Xu Shuangnan, an investor from Wuhan.
Pu Yonghao, the regional chief investment officer at UBS AG, said China's stock market can expect to see similar volatility into the new year.
"Economic growth needs to be supported by growth of the real economy; it takes time for restructuring and upgrading of industries to take effect. Investors may need to fasten their seat belt as stock prices may face continued volatility."
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