HSBC Investment Bank Asia, the merchant banking arm of HSBC Holdings, is looking to tap into growing two-way investment flows between the region and North America. As companies seek to invest in each other's markets, an increasing volume of corporate finance activity between the two regions has spurred the bank to create the North America Corporate Finance and Liaison Unit. The unit, to be based in Hong Kong, will develop trans-Pacific corporate finance business, using the resources of HSBC Investment Bank Asia, HSBC Capital Canada and New York-based HSBC Securities. Hoi Kwan, head of the unit, said there had been a growing trend among companies in Asia and North America to globalise their activities. He said such investment was exemplified by one company investing in another, the establishment of joint ventures and even mergers and acquisitions. 'This has been increasing over the past four to five years,' Mr Hoi said. A recent report by the United Nations Conference on Trade and Development said several Asian economies, such as South Korea and Taiwan, had targeted North America as an investment location when extending their foreign direct investment beyond Asia. In 1992, about 17 per cent of the US$64.4 billion of foreign direct investment from industrialising economies, such as Hong Kong, Korea, Singapore and Taiwan, was directed at North America. Mr Hoi said larger Asian companies were looking to invest in North America to diversify assets. However, North American companies were looking at Asia as a significant growth market. Mr Hoi said he anticipated most of the business initially would be from North American companies seeking to invest in the region through joint ventures and strategic partnerships. The unit expected to be particularly active in raising finance, mainly for small- to medium-sized companies that wanted to invest a mix of internal funding and institutional investment. HSBC's market experience gave the company an advantage over their US-based competitors in the region, Mr Hoi said.