Why Hong Kong’s small stockbrokers are a dying breed despite a hot market
A total of 23 brokers have called it quits in 2025 – and nearly 200 since 2020 – with new IPO allotment rules adding to the pain
Close to 200 stockbrokers have closed their doors in Hong Kong since 2020, and industry players expect more to throw in the towel as new allotment rules make it harder for retail investors to get in on popular initial public offerings (IPOs).
In total, 197 brokers have quit since 2020, reducing the total number to 498 as of the end of June, from a recent peak of 606 in 2019, according to data from the Securities and Futures Commission. New players have joined the market, but far from enough to stem the tide.
The wave of closures came amid a bull run, with average daily turnover soaring 118 per cent to HK$240.2 billion (US$31 billion) in the first half of the year. Fundraising surged eightfold in the same time span, with 42 listings raising US$13.5 billion to propel the exchange’s main board to the top of the global IPO rankings for the first time since 2019, according to data from the London Stock Exchange Group.
Small players have had to settle for a shrinking slice of the pie in recent years. In June, 400 small firms combined to account for just 3.7 per cent of stock turnover, down from 40 per cent in 2000, according to exchange data.
The top 14 players now held 70.9 per cent of the market, while 51 mid-tier firms accounted for 25.4 per cent, the figures showed.