Penny stock bubble collapse is expected to affect UOB-Kay Hian's brokerage income

Stockbroker UOB-Kay Hian saw its third quarter net profit fell by 17.2 per cent to $16.9 million.

This was despite its revenue rising by 9.2 per cent to $63.6 million for the three months to Sept 30.

UOB-Kay Hian said market volumes during the quarter eased on concerns that the US Federal Reserves will start trimming back its bond repurchase programme.

Earnings per share slipped to 2.33 cents from 2.81 cents previously while net asset value per share climbed to $1.5617 compared to $1.4979 as at Dec 31.

Looking ahead, the stockbroker noted that the collapse of the penny stock bubble in October had severely affected investor sentiment.

While its timely and prudent intervention has averted significant bad debt losses, it expects lower trading volumes and brokerage income in the next quarter or two.

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