Tapping into wealth - GREATER BAY AREA - Magazine | Asia Asset Management

The Wealth Management Connect in the Greater Bay Area may see assets reach as much as 100 billion RMB (US$15.71 billion) within five years if financia...

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China ,Beijing ,Shanghai ,Guangdong ,Jilin ,Hong Kong ,Macau ,Singapore ,Chinese ,Franco Ngan ,Dah Sing Bank ,Futures Commission ,Financial Services Development Council ,Hong Kong Bank ,Shanghai Banking Corporation ,Wealth Management Connect ,Greater Bay Area ,Hong Kong Domiciled ,Asia Asset ,Hong Kong Based Zeal Asset ,Mutual Recognition ,China Securities Regulatory Commission ,East Asia ,The Wealth Management Connect In Greater Bay Area May See Assets Reach As Much 100 Billion Rmb Us 15 71 Within Five Years If Financial Authorities Broaden Scope Of Investment Products And Relax Distribution Practices ,Ccording Toa Member Of Hong Kong Amp Rsquos Quasi Government Financial Services Development Council Fsdc Nbsp The Cross Border Scheme Allows Banks To Distribute China Or Domiciled Wealth Products Across Greater Bay Area ,Eijing Amp Rsquos Masterplan To Integrate Hong Kong ,Acau And Nine Cities In China Amp Rsquos Southern Guangdong Province Intoa Finance Business Hub By 2030 The Area Hasa Population Of Over 70 Million Ndash Roughly Ten Times That Hong Kong 12 Singapore Holding 3 Trillion Rmb Investable Assets Nbsp Launched Last October ,He Southbound And Northbound Channels Of The Scheme Have An Initial Combined Quota 150 Billion Rmb Amp Nbsp Although It Opens Up Significant Opportunities For Banks In Greater Bay Area ,Here Is Unlikely To Be Any Significant Capital Inflows In The Near Term Due China Amp Rsquos Tough Covid 19 Restrictions ,Ays Franco Ngan ,A Human Capital Committee Member Of The Fsdc ,Hich Promotes The Development Of Hong Kong Amp Rsquos Financial Services Industry Nbsp China Residents Can Enter And Macau Without Having To Quarantine ,Rovided They Clear Medical Tests But That Amp Rsquos Not The Case For Residents Of Hong Kong And Macau Ldquo Investors In Are Now Reluctant To Physically Go Mainland Cities As Need Undergoa 21 Day Quarantine ,Mp Rdquo Ngan Says In An Interview With Asia Asset Management Amp Nbsp This Is Issue Because Those Looking To Invest Through The Wealth Connect Are Required Open Designated Accounts Person At Participating Banks According ,Tringent Controls On Sales Practices Are Another Stumbling Block For The Scheme Banks Not Allowed To Actively Pitch Products Clients ,Nd Can Only Provide Factual Information Of Products Upon Request From Customers With Designated Accounts Amp Nbsp Easier Than Mrf However ,E Is Positive The Scheme Will Pick Up Steam When Covid 19 Quarantine Restrictions Are Lifted And If Sales Practices Relaxed Amp Nbsp Ldquo We Expect Programme Can Reach Somewhere Between 50 Billion Rmb 100 In Three To Five Years ,Mp Rdquo Says Ngan ,Ho Is Also Chief Executive Officer Of Hong Kong Based Zeal Asset Management He Notes That Southbound Wealth Products Such As Foreign Deposit Linked Funds Appeal To Retail Investors In China Amp Rsquos Onshore Market Where The Choice Investments Relatively Narrow And Homogenous Nbsp Refers From Chinese Cities Greater Bay Area Buying Distributed Macau Northbound Buy By Mainland Banks Ngan Believes Link Can Outgrow An Older Cross Border Scheme ,He Mutual Recognition Of Funds Mrf ,Ver The Longer Term Because Administrative Process Is More Streamlined Amp Nbsp Although Asset Managers In Hong Kong And China Can Distribute Funds Each Other Rsquos Markets Under Mrf ,E Observes That Listing Activities Have Been Somewhat Amp Ldquo Slower Than Expected Rdquo ,Rimarily Due To The Prolonged Approval Procedure He Explains That Locally Registered Funds In China And Hong Kong Are Required Obtain Greenlight For Distribution From Securities Regulatory Commission Or Amp Rsquos Futures By Contrast ,Ealth Management Connect Products Do Not Need Any Specific Regulatory Approval ,Nd Are Eligible For Distribution As Long They Locally Domiciled In The Greater Bay Area And Fulfill Risk Return Criteria Of Participating Banks Amp Nbsp Launched 2015 ,He Mrf Now Has Around 50 Funds With Approximately 20 Billion Rmb Of Assets Under Management Amp Nbsp Product Diversification According To Figures From The China And Hong Kong Governments ,He Northbound Channel Of The Wealth Management Connect Attracted 127 Million Rmb Flows As November 30 ,021 While The Southbound Channel Drew 87 Million Rmb Amp Ldquo Flows Were In Line With Expectation ,Mp Rdquo Ngan Says Amp Ldquo About 90 Of Southbound Investments Are Placed In Deposit Products Such As Foreign Linked ,Hile 80 Of Northbound Investments Are Allocated To Fixed Income Wealth Management Products Amp Rdquo Nbsp He Is Urging Financial Authorities Broaden The Scope Investment ,Hich Are Currently Limited To Those With Low Medium Risk These Range From Treasury Bonds And Money Market Funds ,O Bond And Commingled Funds ,Nd Are Rated R1 To R3 Under China Amp Rsquos Risk Classification System For Investment Products Ngan Argues That The Range Of Is Not Comprehensive Enough Accommodate Asset Allocation Demands Mainland Investors ,Nd Believes That The List Should Be Expanded To Include Moderately Aggressive And Most Products ,Lassified As R4 And R5 Amp Nbsp Ldquo Actively Managed Equity Fixed Income Products Should Be Introduced To The Programme This Will Allow International Banks Well Offshore Asset Managers In Hong Kong Better Bring Their Investment Capabilities Into Play ,Mp Rdquo He Says According Toa Hongkong And Shanghai Banking Corporation Survey In December ,Round 83 Of Southbound Investors Are Keen On Investment Funds ,0 Favour Hong Kong Dollar Deposits ,Nd 25 Prefer Foreign Currency Deposits Amp Nbsp On The Other Hand ,4 Of Northbound Investors Favour Equity Wealth Management Products ,8 Prefer Public Fixed Income Wealth Management Products ,Nd 27 Are Keen On Public Securities Investment Funds The Shares Add Up To More Than 100 Because Respondents Could Choose One Product Regulators Have Thus Far Given Permission 19 Banks Operate Wealth Management Connect Business ,He Majority Of Them State Owned Chinese Banks And International Lenders With Strong Connections In China Three Amp Ndash Hong Kong Rsquos Bank East Asia Dah Sing Singapore Dbs Are Only Allowed To Launch Southbound Services Ngan ,Ho Expects Regulators To Increase The Number Of Participants Eventually ,Ays International Banks With Little Presence In China May Try To Form Partnerships Local Players Specifically For The Scheme ,