Small and medium brokerage firms should strive for improvement, broaden their scope of services, boost their professional knowledge and explore future development strategies amid keen outside competition, Secretary for Financial Services & the Treasury Frederick Ma says.

In his latest FSTB & You article, Mr Ma noted small and medium brokerage firms make up a larger proportion of the brokerage firms in Hong Kong. Among the 430 brokerage firms here, more than 370 belong to Category C with a market share of about 17%.

While economic integration with the Mainland has given the city a distinct edge over other places, and the stock market's total market capitalisation has surged from $4.27 trillion before July 1, 1997 to $6.35 trillion now, Mr Ma believed small and medium brokerage firms should seize the opportunities ahead by enhancing their competitiveness.

"In order to fare well amid keen outside competition, small and medium brokerage firms need to strive for improvement, broaden the scope of their services, increase their professional knowledge and explore future development strategies such as reorganisation or merging," he said.

"This will enable them to enhance their competitiveness by offering customers even higher quality and more diversified services, thereby making better use of the opportunities ahead."

Strategies set to meet future challenges

As the securities industry is an important part of the financial services sector which is a major pillar of Hong Kong's economy, the Government will continue to adopt appropriate strategies to meet future challenges, Mr Ma added.

The strategies are:

* to actively promote Hong Kong's financial services, encourage high quality enterprises of other places, especially Mainland enterprises, to list in Hong Kong, and attract foreign capital to deepen and broaden the financial market;

* to enhance the quality of corporate governance to boost investor confidence as this will also help Mainland enterprises keep in line with international standards;

* to maintain an effective and transparent regulatory regime of international standard to ensure the quality of Hong Kong's market; and

* to step up efforts to attract talented people in financial services and enhance their training.