White CollarSmall brokers cash in on through train demand
Increased retail investor demand for tradingvia the through train sees their profits grow
Small brokers always complain about life being difficult and that it is hard to compete with big players, but a Securities and Futures Commission report on their profitability last year paints a completely different picture.
The 500 stockbrokers at Hong Kong Exchanges and Clearing made a total profit of HK$12.52 billion last year, up 38 per cent on 2013's HK$9.02 billion, the report said.
Average daily stock market turnover rose 11 per cent year on year to HK$69.5 billion.
The November launch of the stock through-train scheme, which allows cross-border trading between the Hong Kong and Shanghai stock markets, added to turnover in November and December and gave a boost to brokers' commission income.
But big players do not seem to have been the main beneficiaries.
The 14 biggest brokers in the city - labelled category A - suffered a 10 per cent fall in profit last year to a combined HK$2.9 billion, down from HK$3.23 billion in 2013.
The next tier of brokers - category B, comprising those ranked 15 to 65 - made a combined profit of HK$6.3 billion, up 56 per cent on 2013's HK$4.03 billion.