SCMP: Internet Trade Booming
Saturday, April 14, 2001
Internet trade booming
ENOCH YIU
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Online trading is continuing to grow in Hong Kong, with almost 44 per cent of last month's turnover from brokers offering Internet trading services.
According to Hong Kong Exchanges and Clearing (HKEx) data, there has been an increasing trend to use brokers with Internet access.
The exchange launched its new AMS/3 stock trading system in October and this enables brokers to offer direct trading for Internet clients.
Brokers who have Internet access with AMS/3 can provide direct trading services.
Investors can place stock trading orders from their personal computers or mobile phones using the Internet.
Brokers without such facilities trade in the traditional way - via telephone calls or visits to brokerages by the clients who ask staff to make the trades for them.
In November, only 32 out of the 500 brokers had the Internet connection with AMS/3.
At that time these brokers represented 13 per cent of total market turnover.
However, with the increasing number of brokers building up AMS/3 Internet access this form of trading has been rapidly increasing its share.
In December, 28 per cent of trade was done through brokers offering Internet access.
It increased to 36 per cent in January, 40 per cent in February and 44 per cent last month. That was when about 80 brokers had Internet access. Meanwhile, others are preparing to join the Internet ranks.
A HKEx official said the increasing turnover by brokers with Internet access might be partly due to the exchange upgrading the Internet trading function of the AMS/3.
But he added that the figures might not fully reflect how many investors were using the Internet to trade.
"This is because the brokerages with Internet access with the AMS/3 may still allow clients to place orders in the traditional way," he said.
United States-based Charles Schwab, the world's largest online broker, said 70 per cent of its Hong Kong clients were using the Internet to trade.
The firm's regional general manager Asia, Christina Hui, said the rising trend was to trade online.
"When Charles Schwab launched online trading for Hong Kong stocks in November only half the clients used the Internet to trade but it has increased to 70 per cent," she said.
"We have seen more and more investors moving to trade online while at the same time they use the telephone to get stock information or other services."
Hang Seng Bank, which has Internet access with the AMS/3, said about 40 per cent of its securities trading was through the Internet. The rest was done via telephone or through bank branches.
" Success seems to be largely a matter of hanging on after others have let go." ~ William Feather
