Securities Services
　

Diversified Clients Base
 
First Securities (HK) Ltd. (“FSHK”) has highly diversified clients base among securities firm in Hong Kong. Background of the Company formally named “Sanyo Securities (Asia) Ltd.”, it was established at 1979 as a wholly owned subsidiary overseas operation for Sanyo Securities Tokyo, Japan (“Sanyo”). First Securities Co., Ltd. Taipei (“FSTW”) purchased from Sanyo at September 1998 after Sanyo submitted court protection in November 1997. FSTW appointed three new directors and remained one, then change financial closing date to 31st December, re-start the operation as FSHK. It successfully handed over excellent clients base from Sanyo, in addition, new clients were brought by the Directors. FSTW supported Taiwan base clients in overseas to enhance subsidiary’s operation more strongly. As of 27 Feb, 2006, First Securities Group has merged with Taiwan International Securities Corporation.

 
Implement New Trading System
FSHK obtained membership from the Securities Exchange of Hong Kong (currently Hong Kong Exchange and Clearing Ltd.) as a participant for securities exchange and clearing in June 1999. We got a license of a registered dealer (CE No. AAA 347) and a investment adviser (CE No. AAA347) from Securities & Futures Commission in Jan 1980 and Jun 2000 respectively. FSHK set up Broker Supply System (BSS) to realize automated trade processing suitable for 3rd generation of Automate Matching System (AMS3) by HKEX. Moreover, FSHK decided to purchase new multi market settlement and multi currency accounting system for expected on-line trading very closed near future.

 
Global Trading Environment
FSHK offers various market trading, you will enjoy more than twelve countries and twenty market like as New York and NASDAQ in USA, London in UK, Tokyo, Osaka and JASDAQ in Japan, Seoul in South Korea, Bangkok in Thailand, Singapore, Kuala Lumpur in Malaysia, Jakarta in Indonesia, Manila in Philippine, Sydney in Australia, Taipei in Taiwan, Shanghai and Shenzhen in China and Hong Kong. Hong Kong market is mother market and through Qualified Foreign Institutional Investor (QFII) quota trading Taiwan stocks. Both of Shanghai and Shenzhen B-share market is a clearing participant, which means FSHK has a licensed foreign broker for trading B-shares outside China.

 
　

On-line Trade
FSHK is planning two phases of business development with respect to internet trading. The first phase begins with local Hong Kong stock trading immediately after obtaining the authority’s approval. The Company will provide the service for both brokers and private investors respectively. The second phase will put the Company into the worldwide stock markets through internet system.

 
1. B2B (Broker to Broker) Business
The Company is acting as an execution broker for brokers in other countries or regions now. One of our major customer brokers is seeking on-line trading through internet. Implementation of on-line trading will solve the time limit and cost issues. This will affect total operation costs significantly. In the case of Korean on-line brokers, they are offering amazingly low brokerage fees 0.025% only per transaction. The brokerage fee is only one tenth of the Company’s current brokerage commission. Korean on-line brokers concentrates on on-line brokerage, underwriting and fixed-income trading and sixty percent of income is from on-line brokerage operation. The on-line brokerage itself has already exceeded the break-even point from July 2001.

 
2. Potential Clients
Japanese private investors are aggressively involved into the China B-share market and recorded a total turnover of JY50 billion during the first half of 2001, according to Japanese news paper Nihon Keizai Shinbun on 15 July 2001. If the Company’s marketing plan succeeds, some of the middle size Japanese brokers will join the Company’s alliance broker network. Korean brokers also have an interest to trade China concept stocks such as Red Chips and H-share in Hong Kong as well as B-share in Shanghai and Shenzhen.
The Company will act as the “Hub” of East Asian six stock markets including Japan, Korea, Taiwan, Hong Kong, Shenzhen and Shanghai in the near future. Furthermore, the Company will be able to access Western Europe stock markets through the London broker in near future. North American and South East Asian markets will be implemented next year. The Company is hoping to become a global securities trading firm within a couple of years. Therefore, on-line trading for the Company’s mother market-- Hong Kong is very important and is the great first step in the Company’s future plan.
3. Marketing Plan For Small Private Investors
First of all, it is not so important how to develop small private investors in Hong Kong at this stage. This is because in general, most private investors in Hong Kong are not so familiar with internet trading so far. It may take a few years for the private investors to take advantage of the convenient internet based dealing tools. According to statistical data in the Korean market, more than two thirds of all turnover was made on-line during 2001. On the other hand, private investors in Japan, the percentage of internet trading versus total sum of private investors’ trading value is increasing to 50%, at JY12 trillion during the period of October 2001 to March 2002, reported by Nihon Keizai Shinbun in 3 May 2002. All these on-line users are very sensitive to trading cost, therefore they chose internet trading and more than 3 million securities trading accounts have been opened as of March 2002.