Wealth Management Connect to help Hongkongers – from tycoon Allan Zeman to housewives – tap China growth story
- 1 million yuan cap is too small, but appropriate for initial stages, says Zeman
- Looking forward to opening an account once the scheme starts operations, says housewife from Hong Kong living in Shenzhen
“I have invested in many different projects in different parts of China, as I strongly believe in the long-term growth of the country. As such, I welcome any new investment scheme, such as the Wealth Management Connect scheme, that will allow investors to participate and invest in the growth story of China,” Allan Zeman, the founder and chairman of Lan Kwai Fong Holdings and its namesake nightlife district in Hong Kong’s Central district, told the Post on Friday.
The 72-year-old tycoon who first came to Hong Kong from Canada in 1970, added that he believed the new connect scheme would be popular.
A survey of more than 1,600 residents of the bay area conducted by HSBC in the fourth quarter found that 82 per cent of respondents were interested in the Hong Kong investment products that would become available through the new connect scheme.
“I would need to study the details of the scheme before I would decide if I would like to invest in the mainland fund products via the scheme,” Zeman said. “Obviously, the 1 million yuan cap for each individual investor is too small. However, I can understand that the scheme is newly launched. A small cap would be appropriate in the initial stage of operation, and we believe the authorities will gradually increase the limit in future to meet the needs of large investors.”
Hongkongers living in the development zone have also welcomed the move. A housewife who only gave her name as Mrs Chow, said her husband, an accountant from Hong Kong working in Shenzhen, received his salary in yuan and the couple could only invest in yuan time deposits and property.
“Since we are from Hong Kong, we cannot invest in any mainland fund products, as this would be considered cross-border trading even though we live in Shenzhen,” she said. Mainland Chinese time deposits offer an annual interest rate of about 2 per cent, far lower than the about 5 to 8 per cent offered by many fund products in China.
“The scheme allows us to diversify our investment to China. For me, a 1 million yuan cap for each individual investor is a good starting point for the learning process about the new cross-border investment scheme,” said Sal To Wing-nin, director of the Yixin Catering Group. He said he was going to invest in mainland fund products via the new connect scheme.
Others were taking a more cautious approach. “I may invest in the scheme in the future, but not now. Beijing’s regulatory crackdown on technology and the private tutoring sectors has made the market very volatile,” said Alex, an engineer who wanted to be identified with only his first name. “I would like to wait until the market becomes more stable before I invest.”
The connect scheme presents significant opportunities for the asset management industry with new growth prospects for banking and wealth management, financial industry group Asia Securities Industry & Financial Markets Association said on Friday. With enhanced financial product variety for bay area residents, the connect could promote capital flows and expect deepened financial cooperation and connectivity between mainland China, Hong Kong and Macau.
Additional reporting by Iris Ouyang