The Asian economic downturn and bleak business prospects are taking their toll on the mainland operations of foreign brokerages. Regional brokerage Sassoon Securities plans to close its Shanghai office by the end of the month while Jardine Fleming Securities has rationalised its Shenzhen, Shanghai and Beijing offices to cut costs and improve efficiency. Sassoon's Hong Kong-based director Christopher Drake said: 'We are closing our [Shanghai] office by the end of the month because of poor business caused by the overall regional economic downturn.' 'Although we have no doubt about the long-term prospects [for the mainland], we have to be realistic about the short-term and the immediate future,' Mr Drake said. A Jardine Fleming official confirmed it had restructured mainland operations to improve co-ordination and to economise, which will lead to the transfer elsewhere of its Shanghai chief representative for securities, William Hanbury-Tenison. JF's offices in Shenzhen, Shanghai and Beijing will report to a Beijing-based country head, Adam Williams, who will help oversee the Shanghai office when Mr Hanbury-Tenison leaves at the end of the month. Mr Williams said: 'Business groups are looking to economise and rationalise over the whole region as a result of the Asian crisis. 'It is much better to have a structure which treats China as a country instead of having all different offices reporting to Hong Kong.' Analysts said more brokerages were expected to scale down their mainland operations in the next few months as concerns about bottom-lines emerged as a top priority. Already, market talk has it that Nikko Securities, which last month announced plans to close its Hong Kong operations, is cutting back in Shanghai and Beijing. But a Nikko spokesman in Hong Kong said there were 'no plans to close the offices in Shanghai and Beijing for the time being'. Sun Hung Kai Securities also denied talk it would cut back its Shanghai operation, Sun Hung Kai Investment Services. Foreign brokerages are only allowed to operate representative offices to provide services such as liaison, research and marketing to their Hong Kong regional headquarters, and are not allowed to generate income. Before the crisis, mainland equity income from B-share, H-share and red-chip fund-raising activities was robust, making it easy to justify representative offices. 'They are cost centres and are hard to justify,' the Shanghai research head of a European brokerage said.