People gather to watch the sunset as they stand on a viewing platform in Tamar Park overlooking Victoria Harbour and the Kowloon skyline in Hong Kong on May 5, 2020. (PHOTO / AFP)
Mainland investors living in the Guangdong-Hong Kong-Macao Greater Bay Area are showing strong interest in the soon-to-be-launched cross-boundary Wealth Management Connect, with over 80 percent of survey respondents planning to invest via the program, according to HSBC and Nielson Company (Hong Kong).
Two thirds of respondents said they are optimistic about Hong Kong’s market outlook and 70 percent of them have the intention to increase their share of assets in the Bay Area, the survey found.
The online survey, released on Wednesday, was conducted in the fourth quarter of 2020, covering 1,606 citizens living in the nine mainland cities of the Bay Area who currently own or intend to buy financial products in Hong Kong in the next 12 months.
Its release came after financial regulators unveiled implementation rules of the program for public consultation on May 6. The rules specified the threshold for mainland investors to make southbound investments, the range of investable products and the quota for northbound investment, and the protection mechanism for investors.
“The findings reveal that southbound investors in the Bay Area have strong interest to participate in WMC,” said Daniel Chan, head of Greater Bay Area, HSBC.
“Guangdong is one of the most affluent regions on the Chinese mainland, with 290,000 families owning over 10 million yuan (US$1.55 million) in assets. As a leading international asset and wealth management center, Hong Kong is a key financial gateway for mainland investors to access a broader range of wealth solutions and manage their global investments.”
The findings reveal that southbound investors in the Bay Area have strong interest to participate in Wealth Management Connect.
Daniel Chan, Head of Greater Bay Area
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With the WMC program, Hong Kong’s financial institutions can help southbound investors on the mainland allocate their assets globally, thereby capturing new wealth of opportunities in international markets, he said.
According to the survey, 67 percent of respondents identified wealth accumulation as their key investment objective, followed by preparing for life in retirement (44 percent) and saving for their children’s education (42 percent).
Among those who have already made investments in Hong Kong, 38 percent invested in funds and 37 percent in stocks. Sixty-five percent of respondents said they plan to diversify investment in Hong Kong to include more types of products.
The survey also found that mainland investors are highly aware of high-tech and ESG (Environmental, Social and Governance), with over 90 percent of respondents saying they could opt to invest in products related to them.
Hong Kong Financial Secretary Paul Chan Mo-po said during a webinar on Wednesday that the WMC will be rolled out soon. Under the cross-boundary program, residents in Hong Kong, Macao and nine Guangdong cities in the Bay Area will be able to invest in wealth-management products distributed by banks in the region.
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Despite the impact of social unrest and the COVID-19 pandemic, Hong Kong’s financial market has functioned well with the city’s unique advantages under the “one country, two systems” principle, the rule of law and other institutional strengths including an independent judiciary and the free flow of information, people and capital, he said.
Denying the rumor of fund outflows from Hong Kong in the past two years, Chan said the city, on the contrary, had seen a total inflow of US$50 billion into the Hong Kong dollar system as of the end of last year.
“Hong Kong’s status as an international financial center remains solid and its competitiveness remains strong,” he said.