The market may be booming, but days of shark’s fin with rice are over for Hong Kong’s brokers
Stiff competition, trade through stock connects and an uncertain market – a lot has changed for brokers since the heyday of 1970s and 1980s
Lunar New Year is a time for bonuses for many Hong Kong brokers, and many of them expect to get a better bonus in the Year of the Dog.
Some companies are expected to give a bonus equal to three or four months of basic pay in the Year of the Dog, compared with one or two months in the Year of the Rooster.
But there is no going back to the good old days of ordering shark’s fin with rice for lunch. In the 1970s and 1980s, local brokers were making a lot of money so easily that they could order the expensive delicacy for lunch.
Brokers’ bonuses are tied to market performance. When the Hang Seng Index rose by 36 per cent in 2017, its strongest showing since 2009, the average daily turnover also rose higher, to HK$88.2 billion (US$11.28 billion), an increase of 32 per cent from HK$66.9 billion in 2016.
The trend continued into 2018, with the Hang Seng Index reaching a record high of 33,154.12 on January 26. The average daily turnover stood at HK$160.9 billion, an increase of 181 per cent when compared with HK$57.2 billion for the same period last year.
There is, thus, good reason for some companies to give good bonuses. But then some brokers, who focus only on retail investors, said the recent rally was driven mainly by institutional trading and not by retail investors.