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KGI Group, the Taiwan-based investment bank which led the way in reducing brokerage commissions for on-line share trading in Hong Kong, is to extend the initiative to other markets in the region.

Spurred by a warm reception to the zero-brokerage offer, KGI chief operating officer Angelo Koo Jun-ynn believes investors in other markets will respond in a similar way.

KGI Asia, the company's Hong Kong securities arm, announced last month that it would waive charges for newly registered on-line clients ahead of a stock exchange decision to abolish minimum brokerage commissions on share transactions.

'We are just delivering what our customers want,' said Mr Koo.

'We will absolutely do it [the zero-commission offer] in other markets if it can get the same result as it got in Hong Kong,' he said.

Under the controversial scheme, clients registering with KGI's newly launched trading Web site kgieword.com before June 30 can trade stock without any commission and handling charges until the end of the year.

The move sparked criticism from some local brokers since the 0.25 per cent minimum commission system is in force until April 1, 2002.

'This is already the trend. There must be somebody else [preparing] to do the same thing later this year,' Mr Koo said.

Mr Koo said the firm would consolidate its different regional Web sites into a single trading platform so that clients in other overseas markets could share the same offer as its Hong Kong clients.

Internet technology would allow clients to go via other centres to make use of such an offer even if local regulations did not allow it, Mr Koo said. In Asia, KGI Group has operations in Taiwan, Hong Kong, Thailand, the Philippines and South Korea, embracing a combined client base of more than 300,000.

Korea had already deregulated its fixed commission rate, said Simon Nip, director of KGI Securities Korea, the 51 per cent-owned Korean arm which was acquired by the firm for US$68 million in January.

The deregulation helped Korea achieve a penetration rate of up to 54 per cent for Internet securities trading - the highest rate in the world, Mr Nip said.

Mr Koo said Taiwan would deregulate its minimum rate next month.

However, he did not expect many brokers to use the zero-commission tactic in Taiwan even after the deregulation since too much of their revenue came from commissions.

'That gives us advantages to compete in the market,' Mr Koo said.



KGI to take zero-commission offer across region