Falling stock market turnover in Hong Kong and Singapore is increasing pressure on medium and small-sized brokerage firms, hurting their commissions and forcing some to cut jobs.
Phillip Chan, Director at Hong Kong listed mid-sized equities firm Shenyin Wanguo Securities says declining trading volumes have had a direct impact on the firm’s business since March.
“We are mainly an equities house — cash equities. Therefore we see an impact when volumes go up or down,” Chan told CNBC. “We see impact straight away. We don’t have any other products, we don’t have any other derivatives, trading, etc.”
Shenyin Wanguo has laid-off employees in the beginning of the year and Chan says the firm is keeping a close watch on costs and hasn’t expanded operations in the past couple of years.
Investors in Hong Kong and Singapore have been reducing exposure to equities because of market volatility and worries about Europe’s debt crisis. Daily stock turnover in Hong Kong plunged by 21 percent in the first four months of the year, while blue-chip stocks in Singapore haven’t seen much activity with action going to penny stocks, according to traders.
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