Hong Kong must seize opportunities with Middle Eastern investors eyeing mainland China market, top banker says
- Standard Chartered’s Benjamin Hung says senior executives of sovereign wealth funds he met last week all agreed assets allocated to China ‘could be increased’
- China, with its partially closed capital account policy, has been under-represented in global asset allocation portfolios, banker says
Sovereign wealth funds in the Middle East are keen to allocate more capital to mainland China as part of diversification efforts but lack awareness of investment tools Hong Kong offers to tap into the mainland market, a veteran banker has said after meeting top executives during a tour of the region.
“While many hoped to gain access to China’s capital pool, some have not even heard of [cross-boundary investment] channels in Hong Kong that could help them tap into China’s population of 1.4 billion,” Standard Chartered Bank’s Asia CEO Benjamin Hung Pi-cheng told the Post in Dubai.
Hung said that in his discussions with the executives, he highlighted the advantages offered by the Shenzhen-Hong Kong Stock Connect, Shanghai-Hong Kong Stock Connect and Bond Connect, which gave investors on each side of the border direct access to the other’s markets.
But the banker cautioned against expecting “immediate results” from the trip, saying improving mutual trust and bridging the knowledge gap were important first steps, and ones the delegation had accomplished.
Senior executives had expressed an eagerness to further learn about available financial instruments focused on China, for example, stocks, bonds, direct investments and equity funds, he said.