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Banking & finance
BusinessBanking & Finance

Hong Kong bank deposits surge by US$50 billion in August as investors target Ant Group, other hotly anticipated IPOs

  • Bank deposits increased for third month in a row, topping HK$14.8 trillion
  • HKMA forced to intervene to weaken currency 15 times in September as hot money chases hot IPOs, secondary listings by Chinese firms

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Hong Kong’s monetary authority has intervened 53 times so far this year to weaken its currency amid an inflow of hot money chasing after stock offerings. Photo: Winson Wong
Chad BrayandEnoch Yiu
The amount of money deposited in Hong Kong’s banking system surged for a third straight month in August as investors chased a series of hotly anticipated initial public offerings (IPO) and secondary listings by Chinese firms in the city.
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Deposits held in accounts rose by HK$387.9 billion (US$50 billion), or 2.7 per cent, to reach HK$14.8 trillion at the end of August, the Hong Kong Monetary Authority (HKMA) said on Wednesday. Deposits were up 8.9 per cent from a year earlier.

It followed a 2.7 per cent increase in deposits in July and a 1.6 per cent jump in June, which at the time was the largest monthly increase in two years. Excluding IPO loans and the resulting creation of deposits, total deposits would have increased by 0.9 per cent, the HKMA said in a statement .

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Tens of billions of dollars of hot money – short-term investment cash chasing quick returns – flowed into the city since April as investors sought to invest in secondary listings by the likes of JD.com, NetEase and Yum China, the operator of KFC and Pizza Hut in the mainland, as well as Nongfu Spring‘s red hot IPO.

Ant Group, the operator of Alipay and an affiliate of Alibaba Group Holding, filed for a dual IPO in Hong Kong and Shanghai near the end of August, attracting even more capital to the city for what could be the world’s biggest fundraising on record. Alibaba is the owner of the South China Morning Post.
Ant Group received approval on September 18 from the stock listing committee of the Star Market, Shanghai‘s Nasdaq-style stock market and is awaiting approval from Hong Kong authorities.

A number of Chinese firms that originally went public in the United States sought secondary listings closer to home in Hong Kong or engaged in “take-private” transactions as relations between Washington and Beijing worsened this year. More such deals are anticipated in the coming months, according to reports.

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