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HK Broker Targets Foreign Investors With Web Trading

Mansion House Group, a 17-year-old Hong Kong investment house, has introduced an online securities trading system primarily to attract overseas customers.

Through its securities trading subsidiary, Mansion House is offering online trading on the Hong Kong Stock Exchange and China's stock exchanges in Shenzen and Shanghai.

"I think the use of Internet trading will give foreigners a feel that the market is accessible at their finger tips," said Norman Lowe, director of Mansion House Securities (F.E.) Ltd.

"Before the coming of Internet trading, buying foreign equities was only reserved for the large institutional investors and wealthy people who could afford to pay steep commissions to international brokers. Internet trading will change all that," added Lowe.

Mansion House also hopes to use the Web site to build up the trading house's exposure and introduce the group's range of investment services to the growing global community of Internet professionals.

The brokerage house is utilizing an online trading system called Mr. Market, an SSL encrypted system developed by another Hong Kong company, Fortitude Securities Ltd.

The relationship between the two companies is mutually beneficial with Mansion House's trading experience plus membership on the Hong Kong Stock Exchange and Fortitude providing the platform and the backend solutions for online trading.

Mr. Market is also the online trading system for Japanese owned Daichi Securities Pacific Ltd. and BKRT Brokerage Services in the United States.

Mansion House's Web site also provides access to trading index graphics and research reports. Real-time quotes can be accessed through the Web site browser but investors must subscribe to independent providers like Netvigator Financial Express, QuotePower, AsiaNetVest and AsianUpdate.

Despite the economic downturn in Asia, Mansion House believes that it's a good time to invest in Hong Kong and China.

"I think the fundamentals of Hong Kong are still quite strong, despite the recent downturn in the economy," commented Lowe. "The deflation in Hong Kong will enhance Hong Kong's competitiveness while the accumulated reserve will enable the Hong Kong government to implement changes that will make Hong Kong a favorable place to invest."

Lowe admits that the broker's online trading system has been slow in attracting large institutional clients and traditional investors.

"We have mentioned the system to our institutional clients but so far they haven't responded," said Lowe. "The reason behind this is because most institutional investors have their own trading system for global equities."

"Our traditional clients are mostly Hong Kong-based companies and high net-worth clients," said Lowe. "The older generation may feel that the telephone approach is more convenient and user-friendly than our system, which requires a little bit of training."

However, Lowe feels that the investors of the younger and middle aged generations in Hong Kong may be more receptive to newer technologies and, as they become more aware of the Web, they will use it for a variety of things including e-commerce.

The other online brokers in Hong Kong securities are Daichi Securities Pacific (another Mr. Market broker), Celestial Asia Securities Holdings Limited (CASH), and Boom Securities Limited.

Boom has, according to many commentators, the richest content environment but it needs to utilize Stock Exchange members to execute trades.

"CASH and Mansion House are exchange members, and we are directly responsible for the clients and their assets," said Lowe. "We follow the Rules of the Hong Kong Stock Exchange and we have to place clients' money into a segregated account."

"On a quarterly basis, we are reviewed by the SFC (Securities and Futures Commission)," responded Mark Duff, CEO of Boom Securities. "Reporting directly to the SFC offers us significant clarity on financial fitness and issues regarding execution accuracy."