HK a clear beneficiary of global capital diversification amid higher rates: Paul Chan

Hong Kong is a clear beneficiary of capital inflow as investors diversify across markets and currencies amid higher rates and greater uncertainty, Financial Secretary Paul Chan Mo-po told the Private Wealth Management Association summit on Thursday.

Chan said total deposits in the city's banking system rose 7.7 percent to HK$20.9 trillion in the first nine months of the year, while initial public offerings raised a record HK$388 billion over the same period, ranking second globally.

He noted that alongside traditional inflows from the United States and Europe, capital is increasingly arriving from mainland China, Southeast Asia, Central Asia, and the Middle East.

Policy push and family office growth

Total industry assets under management grow 20 percent to exceed HK$42 trillion, according to a July Securities and Futures Commission survey.

Hong Kong now hosts more than 3,300 single family offices, an increase of 25 percent over two years, while the New Capital Investment Entrant Scheme has received around 4,300 applications representing an expected HK$150 billion in investment, Chan said.

Chan added that a number of global financial leaders attending the Global Financial Leaders' Investment Summit earlier this week, including about 120 group chairmen and chief executive officers, plan to increase their investment and headcount in Hong Kong.

Tech fortunes and generational transfer

Chan urged private banks to position themselves to capture liquidity at its source as technology, particularly artificial intelligence, becomes the largest contributor to global billionaire fortunes.

He pointed out that mainland enterprises using Hong Kong as a gateway for global expansion listed 116 companies in the city during the first three quarters. 

Dual A-plus-H listings accounted for nearly 70 percent of total funds raised, while firms in AI, semiconductors, and robotics made up more than half, backed by a pipeline of some 500 active listing applications, Chan added.

Meanwhile, Chan called on wealth managers to prepare for a historic generational wealth transfer. 

With women and second-generation heirs making up a growing share of future clients, investment priorities are expanding beyond equities and bonds to include collectibles, art, wine, carbon-credit strategies, and green and impact investing, Chan said.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓