Chinese brokerages, having listed companies producing everything from medicine to cement in recent months, are now taking the logical next step: going public themselves. Everbright Securities, the country's eleventh biggest by assets, plans to raise up to $1.6bn in what would be the sector's first initial public offering in seven years. Lining up behind it are two more brokers, China Merchants Securities and mid-sized Industrial Securities.

Why not? Markets are hot, and new share issues – which restarted last month after Beijing lifted a 10-month moratorium – are being gobbled up. Booming business has further burnished the brokers' credentials. Turnover on the Shanghai stock exchange has quadrupled since last August. And, while the benchmark Shanghai Composite index has risen by 90 per cent this year, the brokerage business has run even further ahead. Citic Securities, the industry's listed giant, has seen its shares gain 112 per cent.

The industry is also in better shape, having restructured and diversified away from the mostly basic business models it sported only a few years ago, when many brokers were on their uppers. Several now have fund management and private equity arms, with the former proving useful profit contributors. Citic Securities' wholly-owned fund manager China AMC earned nearly $200m last year, while the fund management arm partially owned by China Merchant made $35m. Both, according to Z-Ben, a consultancy, delivered healthy operating margins of 38 per cent. Of course, all this froth is going as much to the heads of brokerages as to anyone else. Everbright is coming to market at a hefty 53 to 59 times 2008 earnings, compared with the 40 times on which Citic Securities trades. Still, Everbright's issue will doubtless be several times subscribed – ironic given that brokerage listings are a sure sign of toppy markets.