The euro's introduction will alter the strategies of Hong Kong fund managers in European investments, prompting greater regional and sector focus, according to the Hong Kong Investment Funds Association (IFA).
IFA chairman Desmond Chan Kwok-kit said apart from the efficiency gains of a single currency, the main impact would be on investment management.
'As the process of nationality drops, the focus would probably change from geographical to sector allocation, with an increasing emphasis on the bottom-up stock-picking process,' said Mr Chan yesterday.
Strategy changes would be to some extent forced by the redenomination of European stock exchanges from individual currencies to the euro. Prices of European government debt securities have also been converted to the euro, which started official trading last week.
Already 17 IFA members - about one-third - dealing in European funds have said they will redenominate their funds.
Another 20 members said they had replaced their single dealing and quotation currency with the euro, or had added it as a new dealing currency.
