(Yicai) July 4 -- China's wealth management market contracted by over CNY600 billion (USD82.5 billion) in June from the month before, mainly due to seasonal factors, and it should return to the CNY30 trillion (USD4.1 trillion) mark in the second half, the chief analyst at brokerage Citic Securities said.

The size of the wealth management market often dips in the last month of each quarter month on month, due to factors such as end-of-quarter performance appraisals and the maturity of wealth management products, said Ming Ming. This is particularly noticeable in March and June, two months when banks face large pressure on their deposits.

According to Huaxi Securities’ fixed income team, the wealth management market shrank by CNY640.2 billion in June from May.

But the market should recover this quarter and hit the CNY31 trillion (USD4.2 trillion) mark in the second half, Ming said. It is normal for wealth management products to sell better in the last six months of the year as investors’ appetite for risk increases.

Despite the June slowdown, the first six months logged considerable growth. The bank wealth management market expanded almost 10 percent in mid-June from Dec. 31 to CNY29.3 trillion (USD4.1 trillion), according to statistics from financial data provider Pystandard.

The market will continue to expand even if interest rates are low, Ming said. In the third quarter, the wealth management market will not decline, because even if yields continue to slump, the price of wealth management products remains high.

As the size of the wealth management market recovers, attention needs to be paid to tumbling yields as the growth may slow, a number of industry insiders said.

In May, the average annual returns on three different types of wealth management products dipped from the month before by 0.21 percentage point, 0.16 percentage point and 0.22 percentage point, according to Chengdu-based Pystandard.

Editors: Shi Yi, Kim Taylor