A fear of missing out on the US$1.8 trillion stock rally in Hong Kong and mainland China has driven young investors to open accounts with online trading platforms, while others have been seen queuing up at local brokerages to get in on the action.
However, it has not been smooth sailing for many new investors, most of whom are in their late 20s and early 30s. Some wannabe traders have been unable to open accounts on online trading platforms of banks and brokers, as the systems have been overwhelmed by the sudden influx of users, according to brokers.
Those who did not want to miss out on the party halted their attempts online and went traditional, making a beeline for the bricks-and-mortar branches of brokers to open stock trading accounts. Some found that to be quicker with the help of the staff.
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"It is interesting to see many young investors, in their 20s and 30s, visiting branches of some of the oldest brokers in Hong Kong in recent days to open new stock trading accounts," said Tom Chan Pak-lam, permanent honorary president of the Institute of Securities Dealers, an industry body for stock brokers.
"Usually, these young investors tend to open accounts with online brokers, but now some of them have gone to the physical branches of some traditional brokerage firms as it is possible some of the online platforms may have been too crowded with customers who want to open new accounts to trade shares."
Chan said as the market rally continues, it is likely more investors will open stock accounts to trade shares.
Hong Kong's benchmark Hang Seng Index rose 18 per cent in September, the best month since November 2022. Photo: Xiaomei Chen alt=Hong Kong's benchmark Hang Seng Index rose 18 per cent in September, the best month since November 2022. Photo: Xiaomei Chen>
With the market rally going strong and turnover hitting a record high, this has piqued the interest of youngsters who would like to join the game, as well as dormant investors returning to the market, he added.
The benchmark Hang Seng Index surged 2.4 per cent on Monday to close at 21,133.68, taking the gains to 18 per cent for September, the best month since November 2022. The rally picked up after the US Federal Reserve cut its key rate on September 18, heralding the start of the rate cut cycle, with Beijing's package of stimulus measures on September 24 to support the economy fuelling US$1.8 trillion worth of stock gains in Hong Kong and the mainland.
Tiger Brokers (HK) is among the online players that has seen clients opening new accounts. Account openings last week rose 73.4 per cent from a week earlier, said a spokesman for Tiger in response to queries by the Post. Some 80 per cent of the new accounts were opened by those under 30 years of age, he added.
The number of active users of Tiger's mobile phone app also rose by 10 per cent week on week, he said.
Nasdaq-listed Futu, one of the biggest online brokers in the city, said account opening inquiries last week were 40 per cent higher than normal, with both its online platform and physical stores witnessing strong interest from investors.
Stock trading volume via Futu's online platform last week jumped 95 per cent from a week earlier, while the number of investors rose 60 per cent, according to a spokeswoman.
Both volume and turnover hit the highest in two years, she said.
"The buying spree we have seen among investors in the last week has been mainly in Hong Kong stocks and A shares via the two stock connect schemes with Shanghai and Shenzhen," the spokeswoman said.
The stocks that have seen major investor interest include mainland tech giants such as Tencent Holdings, Meituan, Xiaomi and Alibaba Group Holding, the owner of the Post.
"Many investors said they have many stocks purchased at higher prices some years ago and they would like to sell them via Futu when the market bounces back further," she said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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