Fund managers, private equity investors, brokers and other financial firms have been drawn to Asia’s third-largest financial market as a number of companies are set to launch their initial public offerings.
Financial firms licensed by the Securities and Futures Commission (SFC) rose 3.5% to a record 2,702 at the end of March, compared with the same time last year, according to data by Hong Kong’s financial watchdog.
“The past five years saw significant growth in the population of SFC licensees,” the regulator said.”As of March 2018, the total number of [individual] licensees in Hong Kong reached a historical high
of 44,238, up 3% from the previous year, while the number of licensed corporations surpassed the 2,700 mark,” it added.
The boom in Hong Kong’s finance industry comes at a time when $16.6 billion of shares changed hands everyday on average in the first five months of the year. A number of high profile companies, including several big technology companies, are expected to come to market this year. Analysts forecast a total of $25.5bn in funds will be raised by IPO activities in Hong Kong this year alone.
The SFC also stepped up on its enforcements and supervision, taking disciplinary action against 31 licensed corporations and individuals and imposing $61.5 million in fines during the year, the watchdog said.
“We are moving forward with our front-loaded regulatory approach to tackle market misconduct and other irregularities with earlier and more targeted intervention,” said the SFC’s chief executive Ashley Alder in the annual report.
As fund managers and stock brokers flock to set up shop in Hong Kong, SFC’s finances are improving. The watchdog, which collects fees from every transaction in the market, reported a fiscal surplus of $37m for the year ended in March.