Chinese securities brokerages have seen their valuations soar as investors bet the that the industry is entering a new golden age, fuelled by a booming stock market and financial innovation that is opening up new business areas.

While most have no immediate need for additional funds, brokerages have taken advantage of rising valuations to raise cheap capital.

“For a long time everyone just remembered that brokerages did well during the 2007 bull market and then badly when the market fell and trading commissions dried up,” said Xu Lirong, fund manager at Franklin Templeton Sealand Fund Management in Shanghai. “Now the market is taking a fresh look and realising that things have changed. Their reliance on commissions has dropped substantially.”