As some express concerns about Hong Kong Special Administrative Region’s future as an international financial center (IFC) amid social unrest and the devastating pandemic, financial data showed that the city’s status as an IFC remains stable, with more breakthroughs in the pipeline.
Eddie Yue, Chief Executive of Hong Kong Monetary Authority (HKMA) said in his blog on Monday the city has been recording net inflow of capitals. “While there could be outflows occasionally for different reasons, more money has been coming in, resulting in the net inflows into HKD. And the HKD market has been very stable and functioning orderly in accordance with the design of the Currency Board,” Yue wrote.
Total amount of banking deposits rose in both 2019 and 2020, with 2.9 percent year-on-year growth in 2019 and a further 5.4 percent in 2020, according to his blog.
Meanwhile, Hong Kong’s private wealth management industry has kept growing. Asset under management by private banks in the city went up by 19 percent in 2019 and Hong Kong remained the No.1 private wealth management center in Asia, and No.2 globally, according to the blog. It said that the growth trend has continued on the back of strong 2019 performance, registering double-digit growth in 2020.
Hong Kong has always been the largest private equity hub in the Asia Pacific region after the Chinese mainland. The number of asset managers in Hong Kong increased by 3.9 percent from 1,808 by the end of 2019 to 1,878 by the end 2020, against the backdrop of COVID-19, according to the blog.
In addition, the amount of money raised by IPOs in Hong Kong was only second to NASDAQ by small margin in 2020, and was No.1 in 7 of the past 12 years, read the blog.
Moreover, the average daily turnover of Stock and Bond Connect between Hong Kong and the mainland more than doubled in 2020, with northbound traffic going up by 119 percent and southbound going up by an impressive 128 percent. Yue said that more breakthroughs are expected for Wealth Management Connect and South-bound Bond Connect so as to create more policy headroom.
Hong Kong’s unique access to mainland opportunities and its vibrant fintech and sustainable finance scene provide an excellent launching pad for talents of all sorts, Yue said, noting that the number of jobs in Hong Kong’s finance and insurance industry actually achieved 0.7 percent and 1.4 percent increase year-on-year respectively, despite surging unemployment because of the pandemic.
“The HKMA team has the determination, capability, and commitment to do our part in safeguarding Hong Kong’s financial stability and our IFC status. We are confident because this would be in the best interest of not just Hong Kong but also the wider global financial community,” Yue said.
Pedestrians pass by the office of HKEX in Hong Kong. File photo: VCG
