Hong Kong to focus on fund and wealth management industry

De facto central banker vows to put greater effort into promoting the city's fund industry as the ranks of millionaires swell in Asia-Pacific

PUBLISHED : Monday, 11 August, 2014, 3:13pm
UPDATED : Tuesday, 12 August, 2014, 12:32am

The Hong Kong Monetary Authority will put greater effort into promoting the city's fund and wealth management industry in the next five years, said its de facto central banker.

"In the next five years, the HKMA will put more emphasis on the asset and wealth management industry," said chief executive Norman Chan Tak-lam as he outlined the plans for his second five-year term on the authority's website yesterday.

Chan's goal comes as the number of millionaires swells in Asia-Pacific. The region would soon be home to more people with more than US$1 million to invest than North America, said a report released in June by Capgemini and RBC Wealth Management. It has 4.32 million high-net-worth clients, 10,000 short of the number in North America.

"The challenge for Hong Kong lies in building its brand as a wealth management hub that stands for quality, reputation and confidence," Chan said.

While abolishing the estate duty a few years ago boosted the fund industry, most fund houses still use the city as a sales centre only. About 70 per cent of their work in Hong Kong is related to fund sales, whereas they have a more diversified presence in New York and London.

"The rapid rise in the number of intermediaries is also a reason to applaud. However, it also suggests an underdevelopment of upstream value-added chain," Chan said.

The local fund industry welcomed Chan's support. Hong Kong Investment Funds Association chief executive Sally Wong said: "We believe that with initiatives such as open-ended funds and the mutual recognition of funds, more high-value-added jobs would open up, further bolstering Hong Kong's role as an asset management hub."

Chan said his next five years would also focus on regulating local banks' mainland lending. At the end of last year, such loans stood at HK$2.6 trillion.

"Banks should manage the associated risks and challenges," he said, adding the HKMA would check if banks maintained rigorous risk management standards in lending so that they would not be caught out by a downturn.

Chan said Hong Kong would continue to promote the yuan and treasury management businesses.

"The HKMA is working closely with the Financial Services and the Treasury Bureau to review taxation arrangements to encourage more multinational and mainland corporations to establish treasury management centres in Hong Kong," he said.