HK’s wealth management sector ‘resilient’

Caroline Zheng

Hong Kong’s asset and wealth management business has remained resilient despite geopolitical challenges, with a modest growth of 2.1 percent to above HK$31 trillion last year, according to the city’s financial chief.

About two-thirds of these assets came from investors outside Hong Kong, maintaining a trend consistent with previous years, Financial Secretary Paul Chan Mo-po wrote in his official blog.

Hong Kong continues to hold its position as Asia’s second-largest private equity management center after mainland China, with assets in this category surpassing HK$1.7 trillion in 2023, noted Chan.

The city saw a surge in net capital inflows last year, which increased by more than 3.4 times compared with 2022 thanks to strong performances in private banking and private wealth management businesses, Chan said.

The net capital inflows of Hong Kong-domiciled funds continued to grow, with a net inflow of over HK$87 billion in 2023, a year-on-year jump of over 90 percent, he added.

These figures have fully illustrated that some of the previous worries about capital leaving the city were unwarranted, Chan said.

Meanwhile, Chan said government-backed financial aid for Cathay Pacific Airways has brought about nearly HK$4 billion in returns for public finances.

The local flagship carrier said on Friday that it would buy back the remaining half of the HK$19.5 billion in preference shares issued to the Hong Kong government by the end of this month.

The preference shares were part of Cathay’s HK$39 billion recapitalization financing in 2020 amid the Covid pandemic to help keep the airline afloat.

Cathay redeemed half of the preference shares held by the government in December last year and committed to buy back the other half by July.

The government earned a total of HK$2.44 billion in dividends over the holding period. The complete redemption of these shares marks a steady recovery in the city’s aviation industry, Chan said.

In the government’s accelerated efforts to attract high-net-worth individuals, Chan said the New Capital Investment Entrant Scheme has approved 117 cases in principle since its March launch. The Immigration Department said earlier this month that it granted visas to three applicants who completed the HK$30 million investment under the scheme.

caroline.zheng@singtaonewscorp.com

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