HK investors lack interest in cross-border schemes

Data

Most Hong Kong investors have not participated in the various cross-border schemes that connect the SAR to the mainland, according to a survey conducted by the Hong Kong Investment Funds Association (HKIFA).

Only about 20% of the 411 Hong Kong investors surveyed have invested through the various Hong Kong-mainland investment channels, such as the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect, the Bond Connect and the Mutual Recognition of Funds (MRF) scheme.

However, interest is expected to pick up in the next 12 months, especially for the two stock connect schemes, according to the survey.

Hong Kong investors’ participation in cross-border channels

Source: HKIFA

On the flipside, investors surveyed in Guangdong province, which include those in Guangzhou, Shenzhen and Zhuhai, have been more active users of the cross-border channels, with 44% of them having invested through the Shanghai-Hong Kong Stock Connect.

Guangdong investors’ participation in cross-border channels

Source: HKIFA

In addition, there is strong interest in using these channels, with at least half of investors surveyed indicating interest in using the stock connect and 26% in using the MRF channel in the next 12 months.

The data is consistent with the latest sales figures of the MRF scheme. Since the programme began in 2015, net sales of China-domiciled funds sold in Hong Kong amounted to RMB 470m ($68.41m), which compares with the RMB 9.1bn for MRF funds sold in China, according to data from China’s State Administration of Foreign Exchange (SAFE).

Home bias

The survey noted that investors in Guangdong are more likely than their counterparts in Hong Kong to place assets overseas.

Source: HKIFA. n = number of investors surveyed.

When looking at overseas investments, Hong Kong investors prefer to go for mainland stocks as well as funds, as well as those that invest in mature markets.

Hong Kong investors’ investment preference

Source: HKIFA

For investors in Guangdong, their most preferred overseas asset types are stock and insurance products in Hong Kong.

Guangdong investors’ investment preferences

Source: HKIFA

 

 

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