Virtual Asset Trading Drives Growth in Hong Kong’s Markets

• Securities industry profits rose 50% to HKD 19 billion in 1H 2024.
• Virtual asset trading generated HKD 77 million in revenue for the first time.
• Increased client engagement with 4.87 million active cash and margin accounts.

Hong Kong’s securities industry saw increased profit in the first half of 2024, according to the Securities and Futures Commission (SFC) report. 

Securities dealers and margin financiers posted total net profits of HKD 19 billion ($2.44 billion) in the first six months of 2024. This is a 50% increase compared to the previous six months and a 29% growth year-on-year. The sector continued its upward trend, building on a 25% year-on-year increase in 2023.

Total industry revenue remained relatively flat due to the rise in net commission income, underwriting fees, and trading profits. However, these gains were offset by declines in asset management and corporate finance advisory services. Reduced non-interest expenses were a major driver of profit growth, suggesting that improved cost management played a key role in the industry’s profitability.

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Market activity was robust during this period, with the number of active cash and margin clients reaching a record high of roughly 4.87 million. This growth indicates strong investor engagement, contributing to the industry’s performance despite shifts in specific income sources.

Virtual Asset Trading Shows Strong Growth

What makes the results even more relevant is that virtual asset trading generated HKD 77 million ($9.89 million) in revenue during the first half of 2024, highlighting the growing interest and participation in virtual asset markets.

A joint survey by the SFC and the Hong Kong Monetary Authority (HKMA) found that non-exchange-traded investment products processed by licensed institutions reached a record volume of HKD 1.238 trillion ($159.3 billion) in 2023.

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Dr. Yeh Chi-hing, Executive Director of the SFC’s Intermediaries Division, said that the 50% profit increase is in line with the overall recovery in profitability among licensed institutions. He also noted the diversity of Hong Kong’s financial products, which continues to attract local and international investors, while licensed firms increasingly explore opportunities in virtual asset trading.

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