Hong Kong stock rally draws record number of brokers, fund managers

Hong Kong’s stock market is making a comeback, with the city’s benchmark Hang Seng Index rising 16.3 per cent in the last two quarters, the sixth-best performer out of Asia’s 14 equities markets.

The rally, with average first-half turnover up 12.6 per cent to HK$76 billion every day, means rising fees and trading commissions for the city’s brokers have attracted a record number of brokers and fund managers, the Securities and Futures Commission (SFC) said in its quarterly report released on Tuesday.

There was a 6.5 per cent year-on-year increase in licence applications for brokers, fund managers and financial advisers to 1,698 during the three months to June. This led to a record high number of people working as financial intermediaries by the end of the period, up 3 per cent from a year earlier at 43,204. The number of financial firms operating also reached a record of 2,549, a 13 per cent increase.

Hong Kong law requires all financial companies and their employees to obtain a licence from the SFC.

The record number of players may reflect a healthy market, but the regulator is concerned about a rising tide of new participants who have no previous experience in running brokerages or fund houses.

“A circular issued at the beginning of June reminded the industry that we may revoke the licences of corporations and individuals if they do not genuinely carry out a business in a regulated activity,” the SFC statement said.