Dozens of brokerages have closed in Hong Kong amid persistently poor market performance and a slump in dealmaking.
Thirty brokerage firms in Hong Kong have closed in 2023, according to data from the local stock exchange. This compares with the record 49 brokerages that shut down in all of 2022.
The closures occur amid a continued downturn in the city’s markets. 2023 has been the worst year for initial public offerings since 2001 while the local equity benchmark index recorded its fourth consecutive year of decline – the longest streak ever.
Lossmakers
The challenges have hit brokerage firms as their revenue is mainly derived from trading commissions and margin lending.
According to a survey earlier this year by the Hong Kong Securities Association, over 72 percent of local brokers suffered losses in 2022 with at least a quarter planning to shrink their operations this year.
