Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that nearly 40 brokerages have exited the Hong Kong market in 2024. The withdrawals came Beijing’s efforts to boost liquidity and adopt stimulus plans with the goal of reviving trading.
Hong Kong’s stock exchange saw fewer participants for the third consecutive year amid sluggish trading and lackluster initial public offerings, leaving many smaller brokerages struggling financially. Data from Hong Kong Exchanges and Clearing Limited shows that 37 companies have stopped trading this year and no new participants have joined. Another six companies have decided to restart trading business after suspension. The total number of brokerage firms now participating in trading on the Hong Kong Exchange is now 616.
Brokerages that have exited this year include United Securities Co., Ltd. In its heyday, United Securities was one of a handful of homegrown corporate advisers joining Wall Street giants at the top of the IPO charts, but now its profit margins are razor-thin and the stakes are high. According to Gao Juan, chairman of the Hong Kong Securities Association, the trend of brokers withdrawing from the market may continue for another two to three years even though trading volume has rebounded.
Source: Lianhe Zaobao, December 18, 2024
https://www.zaobao.com.sg/finance/china/story20241218-5616428