HK millionaires pulling out of Europe
Wealthy investors from Hong Kong are turning their focus towards Latin America and Africa, while cutting allocations to Europe, despite improving economic conditions in the continent.
A report from WealthInsights found Hong Kong millionaires slashed their investments in Europe from 11.7 per cent in 2010 to 7.2 per cent in 2014.
The shift away from European investments has a rise in investor focus on emerging markets, particularly Latin America and Africa, WealthInsight economist, Dr Roselyn Lekdee said, with the Asia-Pacific region remaining the preferred location for Hong Kong's high net worth individuals' (HNWIs') offshore investments.
"Similar to China, HNWIs in Hong Kong prefer to keep their investments closer to home with nearly 60 per cent of their foreign assets invested in Asia Pacific in 2014, largely in financial services sector," she said.
"However, with a rather grim regional economic outlook as the Chinese's economy continues to slowdown and the impact of Shanghai stock market crash is taking its toll widely than expected, local investors are now forced to ‘diversify' and ‘select' where they want to invest.
"Emerging markets such as Latin America and Africa have become more attractive due to larger profit margins in their investment opportunities, particularly in FMCG, infrastructure and impact investments."
The report forecast that foreign asset holdings are expected to reach US$546.1 billion by 2019, accounting for almost 40 per cent of Hong Kong's total HNWI assets.
Where are Hong Kong's HWNIs' foreign assets held:
|
Asia-Pacific |
60 per cent |
|
North America |
17 per cent |
|
Latin America |
11.5 per cent |
|
Europe |
7.2 per cent |
|
Africa |
3.1 per cent |
|
The Middle East |
2.7 per cent |
AUTHOR
Nicholas O'Donoghue
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
