HK still best bet for growth, says Chan

Hong Kong still offers international investors the greatest potential for growth, says Financial Secretary Paul Chan Mo-po.

And even though the stock market remains under pressure, funds continue to flow in, China said on his weekly blog.

He said global investors are more focused on the "potential for future growth" rather than past numbers and their sole goal is for "cost-effective returns."

Many international investors who are familiar with Hong Kong agree that the city is one of the best options for investment, Chan said.

Hong Kong's stock market declined for the fourth consecutive year in 2023 amid macro headwinds and the benchmark Hang Seng Index has fallen 5.2 percent so far this year.

However, Chan stressed that Hong Kong is still seeing a net inflow of funds despite external challenges and the high interest rate environment.

He said deposits in the first 11 months rose 4.1 percent to around HK$16 trillion over the same period last year, and total deposit growth for 2023 is estimated to be over 5 percent.

Also, HK$250 billion of funds flowed into the Hong Kong stocks via the southbound trading link.

This shows that funds are still in a state of "net inflows," he said.

Meanwhile, foreign capital inflows into China's onshore bond market rose by 251 billion yuan (HK$276 billion) in December, the second largest single-month increase in history.

This reflects that investment sentiment is gradually improving, he said.

Chan also highlighted the city's wealth management prowess, pointing out that the BCG Global Wealth Report 2023 forecasts the sector to expand by 7.6 percent a year from 2022 to 2027, creating enormous opportunities for local finance and professional services.

Hong Kong's efforts in luring global family offices to the city and the revived investor visa scheme will be new growth drivers for the city's asset and wealth management business, he added.

Chan said the government has been vigorously promoting innovation and technology, artificial intelligence and data science, bio-medicine, financial technology, green finance and even the third-generation internet.

After years of hard work, the relevant ecosystems have gradually taken shape, he said.

Chan said a number of industry leaders have settled in Hong Kong and many private equity and venture capital funds have been attracted to the city in the hope of finding quality investment opportunities.

Speaking at another event yesterday, Chan said he is working hard to achieve a sustainable budget for upcoming financial year, after the city's economy recorded a 3.2 percent growth last year.

Chan left yesterday for the annual World Economic Forum in Davos, promising to speak to investors who have not visited Hong Kong or the mainland in a long time and "introduce the latest developments and opportunities in both markets to them."

themis.qi@singtaonewscorp.com