Sophisticated Financial Hub
Hong Kong is a leading banking, asset and wealth management hub, where leading hedge funds and private equity firms have established presence along with nearly 80 of the world’s 100 largest banks and 70 of top 100 global money managers respectively.
The city has a prudent and robust financial regulatory regime commended by an International Monetary Fund Staff Mission to the HKSAR in 2018. The Linked Exchange Rate System (US dollar peg) has served Hong Kong well as the pillar of monetary and financial stability. The financial sector employs over 263,000 (6.8 percent of workforce) (2018) and directly contributes 19.7 percent to Hong Kong’s GDP (2018).
The vibrant financial market activities are facilitated by the presence of Mainland and international financial institutions, and the capital market infrastructure including a dynamic stock exchange and the world‐leading offshore RMB liquidity.
Financial connectivity with Mainland China has been enhanced over the years. The launch of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect in 2014 and 2016 respectively, are of groundbreaking significance to mutual capital market access between Hong Kong and the Mainland. The Bond Connect scheme launched in July 2017, further improves financial connectivity between market infrastructures in Hong Kong and the Mainland.
Hong Kong also serves as a premier and the world’s largest offshore Renminbi (RMB) Hub. About 75 percent of the global offshore RMB payments are proceeded via Hong Kong in 2019 and the average daily turnover of Hong Kong’s RMB real-time gross settlement system reached over RMB1,100 billion in December 2019.
To expand Hong Kong’s fund distribution network, the city has so far reached mutual recognition of funds arrangement with the Mainland, Switzerland, France, the United Kingdom, Luxembourg and the Netherlands.
Rankings:
- World’s No.1 for Initial Public Offering (IPO) funds raised in 2019 (6 out of the past 10 years)
- Financial system: World’s No.1 (World Economic Forum: Global Competitiveness Report 2019)
- No. 3 in bond issuance in Asia ex-Japan markets in 2019
- World No.1 environment for IPO and M&C activity (Global Transactions Forecast 2019 compiled by Baker McKenzie and Oxford Economics)
With the launch of Faster Payment System offering 24-hour real-time payment and transfer function and the recent issuance of virtual bank and insurance licenses, the financial innovation and inclusion will be further encouraged and enhanced, making the region an ideal hub for family offices.
Client Testimonial“ Hong Kong boasts its world-class infrastructure, rule of law, and diverse talent pool. It is also an international financial hub with sophisticated financial connectivity and a gateway to the Greater China market. ”
Charles Hung
CEO & Executive Director, Blue
Sources:
1 The Asset and Wealth Management Activities Survey conducted by the Securities and Futures Commission (“SFC”).
2 Excluding the business of SFC-authorised real estate investment trusts and assets held under trusts attributable to non-licensed corporations or non-registered institutions.
3 Preqin. Singapore, with a hedge fund asset size of US$20 billion, came second.
4 Asia Venture Capital Journal (AVCJ). According to AVCJ, the relevant figure of Singapore was US$40 billion as at end-2019.