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Enoch Yiu

While many small local brokers are finding it hard to survive amid the tough competitive environment, Tung Tai is expanding through acquisitions.
The brokerage, headed by Vincent Lee Kwan-ho, a veteran broker who is also a director of Hong Kong Exchanges and Clearing, completed a deal worth almost HK$10 million last week to buy Hang Tai Securities.
Both brokerages were set up about 40 years ago, serving mainly local retail customers.
Hang Tai's founding owner, So Kan-chi, said he sold his brokerage with 6,000 clients to Tung Tai as he wanted to retire.
"I am 82 years old and I think it is time to call it a day," So said. "I have many good staff whom I treat as my children while I have many clients who want to continue to trade stocks. By selling the company to Tung Tai, I ensure that my staff keep their jobs and the customers are served well."
Lee said he wanted to expand by acquisitions as he believed the market would bounce back next year.

"The impact of the global financial crisis in 2008 has faded. The US and European markets have bounced back this year, while the Hong Kong and mainland stock markets are expected to have a bull run again next year," he said.
"As such, it's time to strengthen my brokerage by way of acquisitions to capture the business opportunities."
Lee admitted the business environment had been getting increasingly tough for brokers after the stock exchange abolished the minimum commission system for the industry in 2004, allowing the players to freely negotiate prices with customers. That led some banks and brokers to compete over prices.
Last month, King Fook Securities became the 12th brokerage in the city to shut its doors this year amid a slump in the turnover of the stock market with the Hang Seng Index trading below its five-year average.
More closures are expected to come in the wake of a rise in running costs and rents while the owners of many brokerages are reaching retirement age.
There are now about 500 brokerages in Hong Kong, with the top 65 accounting for more than 90 per cent of market turnover while the 400 smaller players share the remainder.
Lee believed acquisitions might allow the smaller firms to survive and compete.
"Cost efficiency can be enhanced if two or three small brokers are combined together as they can share the same office and back-office staff," he said. "If other small brokers want to sell their business at a reasonable price, I will consider it."
He added it would be helpful if the stock exchange introduced more stock and commodities products for retail investors as this would help improve business for small brokers.


Tung Tai braves tough market with expansion

Vincent Lee says small brokers will stand to benefit if the stock exchange introduces more stock and commodities products. Photo: Dickson Lee

The top 65 brokerages in Hong Kong account for more than 90 per cent of the turnover of the stock market. Photo: Bloomberg

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Broker pins hopes on acquisitions in survival game as the business environment is getting increasingly tough for the smaller players


While many small local brokers are finding it hard to survive amid the tough competitive environment, Tung Tai is expanding through acquisitions. The brokerage, headed by Vincent Lee Kwan-ho, a veteran broker who is also a director of Hong Kong Exchanges and Clearing, completed a deal worth almost HK$10 million last week to buy Hang Tai Securities.


Tung Tai braves tough market with expansion

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Broker pins hopes on acquisitions in survival game as the business environment is getting increasingly tough for the smaller players

Broker pins hopes on acquisitions in survival game as the business environment is getting increasingly tough for the smaller players