Singapore lights beckon as HK lure dims
Some foreign wealth managers are scrapping plans to open offices in Hong Kong in favor of Singapore as the rich begin to move funds from the SAR, where an extradition bill has stoked public unrest, people familiar with the matter said. A mid-sized European private wealth advisory firm has abandoned...
Tuesday, July 02, 2019
Some foreign wealth managers are scrapping plans to open offices in Hong Kong in favor of Singapore as the rich begin to move funds from the SAR, where an extradition bill has stoked public unrest, people familiar with the matter said.
A mid-sized European private wealth advisory firm has abandoned a plan to set up its Asia arm in Hong Kong and will instead aim to launch it in Singapore, its London-based chief executive said.
"We have been watching the situation and what we are seeing in Hong Kong doesn't give us much confidence," said the chief executive.
"For me, the most important thing is stability for clients because you don't want to invest US$1 million (HK$7.8 million) to US$2 million to set up operations and then one day you need to shut it down because your clients don't feel safe to operate in that market."
Some SAR tycoons have begun moving their personal wealth offshore, it was reported last month.
For the wealthy, a key worry is that Beijing may eventually be able to seize their assets, leading them to weigh moving their assets offshore. Wealth managers mostly go where their clients prefer to park their riches.
Uncertainty over the bill clouds the SAR's outlook as a wealth management hub, one of the main pillars of growth in Hong Kong, which has been losing ground to Singapore in recent years.
In a survey by trade publication Asian Private Banker last year, 58 percent ranked Singapore as the most preferred offshore wealth management hub, followed by Hong Kong and Switzerland, respectively.
It said compared to the SAR Singapore had become attractive as it was "less connected to the mainland from a regulatory, political, and financial perspective."
Rahul Sen, a London-based global leader for private banking at headhunter Boyden, said three of his multioffice wealth advisory clients decided in the last few weeks to hire teams of bankers in Singapore after initially considering Hong Kong.
"New teams that are being set up, they are asking why should they align with Hong Kong when its future as an independent wealth hub is uncertain," Sen said.
The head of Singapore's central bank said last week there were no signs of "any significant shift of business or funds" from Hong Kong to Singapore.
Singapore property brokers, though, said they are seeing increased inquiries and visits from SAR-based groups, including real estate fund managers and family offices, or private investment vehicles of the rich.
Ian Loh, head of investments and capital markets at Knight Frank Singapore, said the investors are looking at a range of properties - including offices and hotels - starting at around S$200 million (HK$1.15 billion) and going to over S$500 million.
Some analysts said it remained to be seen if bigger financial institutions would move assets out of Hong Kong or bypass it. "Singapore could be one of the beneficiaries as Hong Kong investors and high net worth individuals look to shift their funds out of Hong Kong," said Jenny Ling at Colliers International.
"But the likelihood of a knee-jerk reaction among companies to immediately vacate Hong Kong en masse as a result of the unrest is probably quite low."