Wealthy investors looking to move their assets for investment or relocate themselves over the next 12 months favour Singapore over Hong Kong among major destinations in Asia, according to a report published by HSBC.
Nearly 70% of high-net-worth investors said they are considering moving some or all of their wealth to a new location over the next 12 months, according to the Global Entrepreneurial Wealth Report released by the UK lender on Monday. Switzerland was their top pick, while Singapore ranked fourth and Hong Kong seventh.
About 55% are considering personally moving to a new location, with Singapore their favoured destination. Hong Kong failed to make the top 10 list.
Singapore came out on top among financial centres for rich entrepreneurs to invest their wealth and conduct business in Asia over the next 12 months.
HSBC surveyed 1,882 business owners in the United States, United Kingdom, France, Hong Kong, India, mainland China, Singapore, Switzerland, Taiwan, United Arab Emirates, Japan and Australia in July and August. These entrepreneurs have at least US$2 million of investible assets, with one-third of them having at least US$100 million.
"The survey showed that Hong Kong and Singapore remain as the most appealing markets in Asia for wealthy individuals," said Wilson Chan Fung-Cheung, associate director of the MBA programme at City University in Hong Kong. "As a gateway to mainland China, Hong Kong still offers plenty of business opportunities and upside."
The timing of the survey may have some influence on the results, as both Hong Kong and mainland's financial markets struggled to contain losses. Beijing only unveiled its stimulus blitz in late September, which fuelled a world-beating rally in the Hang Seng Index and onshore equity benchmarks.
The HSBC report showed 8% of the respondents favoured Singapore as an investment destination over the time horizon, while 9% of them planned to do business there. Hong Kong received 6% and 7% of the votes, respectively.
In terms of relocation, Singapore was ranked just ahead of Switzerland, US, UK, Germany, France, Australia, UAE and Malaysia, in that order. Hong Kong's failure to make the grade may be due to concerns about potential fallout from fragile US-China trade ties, Chan added.
Assets under management in Hong Kong and Singapore each stood at around US$4 trillion last year, according to government data. The Asian financial hubs compete for capital, business and talent to help expand their financial services and economies.
The HSBC report is in stark contrast to the Global Financial Centres Index in September, in which Hong Kong dethroned Singapore as Asia's top financial centre for the first time in two years. Globally, Hong Kong ranked third behind New York and London, with Singapore and San Francisco rounding off the top five.
The Global Financial Centres Index tracks 121 cities and is compiled by the China Development Institute in Shenzhen and London think tank Z/Yen Partners.
Hong Kong's appeal is also reflected in a more vibrant stock market, where initial public offerings (IPOs) on the main board have generated US$7.14 billion in proceeds during the January to September period, doubled from a year earlier. Singapore has had no IPOs since the start of 2023.
"Singapore has also faced challenges, as the requirements and enforcement of regulations earlier this year created a significant negative impact on the wealth management industry," Chan added.
The Global Entrepreneurial Wealth Report also showed a high level of confidence among the respondents, according to Annabel Spring, CEO of HSBC's global private banking and wealth unit.
On average, nine out of 10 of them believed their business prospects and personal wealth would improve in the next few years, she said. Respondents from India were the most bullish at 98%, while those from mainland China were the least optimistic at 80%.