An industry survey found that more than 40 percent of the local stock brokers believe Hong Kong is the "most investable" market among all regions this year.

However, in releasing its annual capital market report, the Hong Kong Securities Association (HKSA) also noted the industry faces surging operational costs, partly due to technical upgrades, while more clients switched to online brokerages amid fierce competition.

The report included a survey of 152 local stock brokers between January 13 and 23, which found that 70 percent of respondents planned to hire more staff this year to handle information and technology (IT)-related issues.

Speaking at a press briefing, the association's chairman, Richard Wo, noted that despite the booming market, 28 percent of the brokerages surveyed reported operational losses last year, and only 29 percent of them saw operational profits.

"On the one hand, we are aware that the government, or the Hong Kong Exchange [and Clearing], (HKEX), is quite focused on further strengthening the market, especially the retail market," he told reporters.

"But at the same time, market participants who serve the retail market are facing the cost challenges from time to time, including the increasing costs of IT, and the new development from different initiatives have added up to the IT costs as well.

"That's why we hope the HKEX might be able to take up some of these challenges, and to share the burden together with the industry," he said.

Meanwhile, the association's vice chairwoman, Peony Lee, noted that while IT operational costs rose the most, there was also pressure on brokerages to meet regulatory compliance requirements.

She believed as more online brokerages emerge, the industry would become more tech-driven, with many offering diversified services to cover wealth management, institutional customer services, and cross-border businesses.

Wo also believed there was room to further strengthen the securities market connectivity between Hong Kong and the mainland.

Among all regions, 42 percent of respondents believed Hong Kong was the "most investable" market this year, while 28 percent opted for the mainland, and 11 percent voted for the US.

Nearly 60 percent of the respondents believed the US market posed the highest risk this year, and 43 percent of them cited Sino-US tensions to be the major factor affecting Hong Kong's capital market, followed by considerations over interest rates and the mainland's economic recovery.

Almost half of respondents eyed an about five to 20 percent increase in the Hang Seng Index this year, with finance, tech, artificial intelligence, and medical care sectors being the top performers.