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Survey: Hong Kong fund sales drop

Sales of collective investment schemes in Hong Kong dropped by 15% from HK$65bn (US$8.4bn) to HK$55bn during the period April 2015-March 2016, according to the SFC's yearly survey.

Moreover, sales of all investment products dropped by 19% to HK$380bn during the period.

Ten firms dominated the market, representing 69% of total sales for all investment products, according to the survey. They are international financial conglomerates, brokerage groups, investment advisory firms and asset management firms. 

As for new entrants, the total number of licensed corporations selling investment products was up by 15% from 213 in the previous survey.

The findings came from a survey conducted by the Securities and Futures Commission, which included 244 licensed corporations that sold investment products to individual investors during the period. Around 66% or 160 of those licensed corporations sold collective investment schemes.

According to the survey, the two firms that saw the largest decrease in the sale of collective investment schemes attributed the drop to reduced demand from clients during the reporting period and the disposal of wealth management business lines.

Private banks have been divesting or closing their wealth management units in Asia, with Edmond de Rothschild and ABN Amro the latest to do so, FSA reported earlier.

Five firms contributed HK$30bn or 55% of total sales for collective investment schemes, which included one international financial conglomerate, two investment advisory firms and two asset management firms, according to the survey. Equity funds were the most popular type of funds sold to individual investors, according to the survey.

Fifty firms reported to have participated in the sale of high yield bond funds with a transaction amount of around HK$2bn or 4% of the total sales for collective investment schemes.

Total sales down

Total sales of investment products, which include structured investment products, fixed income products (government and corporate bonds), collective investment schemes, hedge funds and swaps and repos, dropped by 19% to HK$380bn from HK$468bn, the survey showed. The decrease was attributed to the drop in the transaction amount of interest rate swaps by around HK$83bn as a result of reduced demand from clients.

Structured investment products were most favoured type, accounting for 44% of total sales.


Source: Securities and Futures Commission

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