A fishing boat plies in Victoria Harbour with residential and commercial buildings in Hong Kong’s Western District in the background on Feb 13, 2024. (SHAMIM ASHRAF / CHINA DAILY)
About two thirds of investors polled have voiced a willingness to start investing, or to boost their existing investments, through the Cross-boundary Wealth Management Connect program, the latest survey by HSBC found, with the upgraded version of the wealth management connect coming into effect on Monday, providing investors with more options and an increased investment quota.
The enhancement of the program, which includes a relaxed entry threshold, extended investment options and an expanded individual investment quota, is expected to increase the attractiveness of cross-boundary investment among residents in the Guangdong-Hong Kong-Macao Greater Bay Area, according to the survey, published on Monday.
On average, respondents indicated that they plan to invest 710,000 yuan via the wealth management connect and expect an annual return of 7.7 percent
With the individual investment quota having been increased to 3 million yuan ($416,774) from 1 million yuan, about one-fourth of current or prospective investors said they intend to invest 1 million yuan or more through the program in the next 12 months, according to the survey.
On average, respondents indicated that they plan to invest 710,000 yuan via the wealth management connect and expect an annual return of 7.7 percent.
ALSO READ: Hui: Cross-boundary wealth connect sees nearly $1b remitted
The findings of the survey are based on online interviews with more than 2,000 residents in the Greater Bay Area between January and February. The respondents were mainly those with liquid assets of more than 1 million yuan, or those who have less than 1 million yuan in liquid assets but earn an annual income of over 400,000 yuan.
“The latest enhancement to the wealth management connect has further increased the attractiveness of the program, fueling investments and promoting even deeper integration of the financial sector in the GBA,” said Daniel Chan, head of the Greater Bay Area at HSBC.
“In addition to opening the door to greater market opportunities, investment channels and diversified investments, survey respondents have emphasized that wealth planning and advisory services are key factors for their increased participation in the scheme.”
According to the survey, investors showed the most confidence in sectors such as energy, technology, natural resources, biotechnology and finance, with over 80 percent indicating there is a need for banks to provide cross-border investment advisory services.
ALSO READ: Mainland, SARs expand access to Wealth Management Connect
The Cross-boundary Wealth Management Connect program, which was formally launched in September 2021, enables residents in the mainland cities of the Greater Bay Area to invest in wealth management products distributed by eligible financial institutions in Hong Kong and Macao, while Hong Kong and Macao residents can invest in wealth management products distributed by eligible mainland financial institutions.
To meet new market demand arising from the enhanced measures, major banks have rolled out upgraded products and services.
The Bank of China (Hong Kong) has increased its products under the Cross-boundary Wealth Management Connect by more than 60 percent, bringing the total to nearly 300.
The Industrial and Commercial Bank of China (Asia) has announced it has raised the number of products available for mainland investors from 102 to 189, an increase of 85 percent.
READ MORE: GBA investment program sees big jump in participants
Standard Chartered has expanded its selection of wealth management products in the southbound channel, offering nearly 550 options for mainland investors, while for the northbound channel, it has enriched its selection of renminbi deposit products, and introduced more than 40 publicly offered investment funds with a risk rating of R4, or medium- to high-level risk.
“The Cross-boundary Wealth Management Connect is of great significance in advancing market connectivity of the Greater Bay Area and facilitating the opening up of the Chinese mainland’s financial market. We look forward to leveraging the new enhancements to the program to further stimulate the growth of the wealth management business in the region,” Anthony Lin, CEO of the Greater Bay Area at Standard Chartered, said.
