Hong Kong’s fund industry on road to recovery as financial watchdog looks to raise global appeal of city’s markets

‘We’re beginning to see some good signs of recovery,’ says Christina Choi, an executive director at the Securities and Futures Commission

Watchdog aims to enhance cross-border trading schemes and ties with the Middle East, the rest of Asia and around the world

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Hong Kong’s financial district as seen from the Hong Kong Convention and Exhibition Centre in Wan Chai. Photo: Yik Yeung-man

Published: 2:00pm, 30 Jan 2024Updated: 2:36pm, 30 Jan 2024

Hong Kong’s fund industry remained resilient amid macroeconomic challenges last year and is starting to rebound now, according to a director of the city’s financial watchdog, who adds that increasing the city’s global competitiveness and its connections with other markets are top priorities for future development.

“We’re beginning to see some good signs of recovery,” Christina Choi, executive director of investment products at the Securities and Futures Commission (SFC), said during a panel discussion at an industry event on Monday. “2023 remained full of challenges with high interest rates, inflation and geopolitical tensions, but the asset-management industry remained comparatively resilient.”

Hong Kong-domiciled funds saw 5 per cent growth in assets under management in 2023, with net inflows increasing more than 200 per cent year on year in the first three quarters to HK$54 billion, Choi said at a roadshow held by the Association of the Luxembourg Fund Industry.

Looking ahead, Choi cited the three-year strategic priorities for Hong Kong’s securities market released by the SFC last week, which include maintaining market resilience, enhancing the appeal of the city’s capital markets, improving operational efficiency, leading financial transformation via technology and ESG (environmental, social and corporate governance).

Exchange Square, home of the Hong Kong Stock Exchange. Photo: Xiaomei Chen

“The idea is not just that we need to update and implement international standards, but we want to take a fresh look at the product approvals in Europe,” Choi said. “We closely monitor and try to think ahead – how could we facilitate the launch of similar products here while maintaining investor protection.”