Thursday, October 11, 2001
Online trading in China soars
SAMUEL YEUNG
Online stock trading has grown rapidly in China, with more than 5 per cent of transactions now on the Internet compared with about 3 per cent in the first quarter.
Analysts say this trend is carrying China towards the forefront of growth in online trading in the region, including Hong Kong.
In August, the total value of online stock transactions in China amounted to 29.5 billion yuan (about HK$27.64 billion).
This was up 10.9 per cent from the previous month, according to the Web site of the China Securities Regulatory Commission (CSRC), the securities industry watchdog.
This represented 5.53 per cent of the country's total stock and mutual fund turnover of 533.6 billion yuan during the month.
The number of online accounts in the mainland rose to 3.01 million in August from 2.89 million in July.
During the first quarter, only 3.41 per cent of stock trading was through the Internet and the number of online accounts was 2.33 million.
In June Kit Yau, online financial services research manager at International Data Corp (IDC), estimated that the mainland's online trading accounts would not reach three million until the end of the year.
"The growth of China's online trading industry is even faster than I thought," Ms Yau said yesterday.
According to the IDC report in June, which was based on last year's figures, the penetration of online trading in China was about 2 per cent, against Hong Kong's level of 5 per cent.
Unlike the CSRC, SAR regulators the Securities and Futures Commission and Hong Kong Exchanges and Clearing do not provide regular updated statistics covering the online trading market.
Many analysts have warned that the development of online stock trading in Hong Kong is increasingly lagging most of its neighbours.
For example, a report in March by PricewaterhouseCoopers said Hong Kong traders were adopting online broking at "a far slower pace" than other markets such as Japan, South Korea and Taiwan. "The growth and penetration of the market for Internet trading [in Hong Kong] . . . has not seen the rapid growth it has experienced elsewhere," the report said.
Ms Yau said many local brokers lacked initiatives to convert their businesses to online-based operations.
"Because the local market had enjoyed high trading volume for a long period of time, it may make brokers think they don't need to do anything [to remain competitive]," Ms Yau said.
Meanwhile, given the slow adoption of online broking in Hong Kong, some local online brokers have tried to extend their businesses to overseas markets.
Boom Securities, for example, yesterday announced its proprietary online trading infrastructure which serves both local and overseas institutional customers.
Managing director Mark Duff said 38 retail banks and brokers, among them about 25 per cent from overseas, had signed with the firm's system which provided professional services such as order execution, back-office accounting and overseas custodial service.
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