Hong Kong brokers thrive on diversification and Chinese capital inflows
Hong Kong’s stock brokers have weathered two financial crises, stock market crashes and technological disruption in the past two decades, and here’s why.
In the era of Robo-advisors and online transactions, Hong Kong’s more than 500 brokers have found a way to thrive.
The path to survival in the past 20 years hasn’t been easy but two factors ruled: diversification and the entry of mainland capital.
“Diversification of business lines would be the key to success. If we had remained only as a stockbroker , the profit margin would have been so thin that we would find it hard to deliver a profitable business,” said Kevin Tai Yiu-kuen, chief operating officer of Sun Hung Kai Financial in an interview with the South China Morning Post.
“The client’s investment habits have also changed nowadays; that they do not only trade stocks, but they also like to trade futures, forex, bonds and funds. We have developed these different products lines ranging from bonds, asset management, insurance and private banking to meet with their needs,” he said.
Sun Hung Kai Financial is also 70 per cent owned by Everbright Securities, China’s eighth-largest brokerage which paid HK$4.1 billion in 2015 to Sun Hung Kai & Co. for the stake. The Hong Kong securities business of Everbright will be merged with the company.