The stock brokerage arms of financial services giants are gobbling up market share at the expense of Hong Kong's small brokers, with big banks using cross-selling strategies and wealth management packages to lure retail investors, according to a leading broker.
The latest stock exchange figures show the city's 385 smallest brokers accounted for only 14.08 per cent of market turnover last month - the second-lowest figure.
Several key industry figures have suggested that small brokers' diminishing market share reflected poor investor sentiment, as shown by the relatively measly $292.35 billion stock market turnover last month - the lowest in eight months.
But William Lee, group executive director and chief operating officer at Tai Fook Securities, said the shift among clients away from small brokers - many of them family-run and with only a few employees - instead of waning market sentiment, was the reason behind their falling market share.
'Many retail investors who were once used to dealing with brokers have now chosen to stick with their own banks for a variety of reasons,' he said. 'So although market sentiment has been good, some small brokerages are still losing business.'
Mr Lee said the trend had had only a slight impact on Tai Fook so far.
