KGI Hong Kong Group (KGI HK), which commenced operations in early 1997, is a 99.6%-owned subsidiary of KGI Securities.  In 1999, KGI HK acquired Seapower Securities Ltd. and Seapower Futures Ltd., transforming itself into a versatile financial services company with a strong local market presence.  KGI HK offers a broad range of brokerage services, covering the equity, futures, bond and derivatives markets.  It also conducts investment banking business.  KGI HK has grown to become one of Hong Kongˇ¦s largest equity brokers and a top-ten futures and options broker by market share.  It now has three branches and a staff of 533 in Hong Kong.

As Hong Kongˇ¦s economy is highly reliant on the financial and trading sector, it has been severely affected by the financial crisis.  GDP growth slowed to 2.50% in 2008 (with fourth quarter decline of 2.50% year-on-year), well below annual growth of 6-7% in 2005-07.  The operating environment of Hong Kongˇ¦s financial sector turned negative given the combined impact of the collapse of Lehman Brothersˇ¦ mini-bonds and the negative wealth effect stemming from rapidly shrinking financial asset value.  Another factor was the Hang Seng Index, of which average turnover dropped 18% in 2008 from the year before.  The market fell 48% last year.  Under these dire conditions, the operating revenue of KGI HK declined 39% from 2007 to US$62.5mn.  Notwithstanding, KGI HK stood by its core principles of providing high quality, value-added financial services and of remaining innovative and seeking new business opportunities.  These included OTC options, structured notes, equity swaps, convertibles and asset swaps. 

Going forward, KGI HK will continue to aggressively leverage group resources and customer base to expand the scale of every business division, strengthen its competitive advantages and build up its risk control mechanism.  These efforts will serve KGI HK well in the competitive Hong Kong financial market and reinforce its standing as the best partner to have in the investment planning field.