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Hong Kong holds China fintech advantage

Hong Kong has better access to capital than Singapore and it will reap benefits from China's fintech rollout, said Mathias Helleu, chairman and co-founder of Hong Kong-based 8 Securities.

Hong Kong and Singapore regulators are in a rivalry to make their home jurisdictions the most favourable for fintech investments, FSA reported eariler.

At a briefing today in Hong Kong, Helleu said: “The question I hear all the time is what do you think of Singapore versus Hong Kong. Both places have strong assets, but they are very different. Hong Kong is a much larger financial services center than Singapore,”

The latter has a more Southeast Asia focus, such as Indonesia, Malaysia as well as Australia. “But China will fuel Hong Kong’s growth as the largest global market [in terms of value of fintech investments],” he noted.

Onshore China accounted for 92% of Asia’s fintech investment, or $8.85trn, as of July 2016, according to figures from Accenture and CB Insights cited by Helleu.

It is followed by $339bn in India, $165bn in Hong Kong and $107bn in Australia/New Zealand. Singapore only has about $35bn of fintech investment.

According to data compiled by Business Insider, China already has the largest fintech companies in the world – among the 27 fintech unicorns (private companies whose valuations exceed $1bn), the four largest companies are all from China: Alibaba-affiliated Ant Financial ($60bn), peer-to-peer lender Lufax ($18.5bn), Tencent-backed JD Finance ($7bn) and ($5.9bn) which offer monthly installment plans for online shoppers.

Robo-advisors march in

Robo-advisors are trickling into Asia, aiming to fill gaps in wealth management, which is dominated by private banks serving wealthy clients.

In Hong Kong, 8 Securities is today launching Chloe, a digital advisory platform, after making the announcement in August. The portfolio is constructed based on a user’s goal and risk profile and is managed by iFast Financial. It will consist of roughly 10 Hong Kong-listed traditional ETFs.

Minimum investment stands at HK$1,000 ($129). No management fees will be charged for investments under HK$8,888 but there will be an annual fee of 0.88% above that amount, the firm said.

The platform is aimed at millennials “largely ignored” by big banks. The firm believes this group has limited choice of mainly expensive investment products.

Helleu added that launching the service in mainland China is not a priority, but he is looking into partnerships with onshore firms.

Yunfeng Financial Group CEO Li Ting, a Hong Kong-listed brokerage arm backed by Alibaba’s chairman Jack Ma, earlier said the firm is planning to launch a robo-advisor in the SAR, but he did not provide details.

In Singapore, various robo-advisors have been launched but mainly within the high net worth investor space, such as Crossbridge Capital, Bento, as well as US-based Hedgeable.

Part of the Mark Allen Group.