Hong Kong’s wealth market is poised for a rebound after a pandemic-affected 2020, new research from GlobalData suggests.
The number of affluent, mass affluent and high net-worth investors is expected to grow 7.8 per cent to reach 3.9 million this year. Sixty per cent (60.6) of Hong Kong’s population are considered in these wealthy categories, a much higher rate than Singapore (32.2 per cent), China (5.3 per cent), and India (0.7 per cent).
The percentage of affluence grew for several years before being halted in 2020 as the pandemic hurt real estate and stocks, two areas where Hong Kong investors tend to put much of their money
“The population of the affluent investors is expected to rise in coming years supported by the recovery in the economy, widespread vaccinations and improvement in stock market performance” GlobalData lead banking and payments analyst Ravi Sharma said. “Furthermore, an expected increase in residential property prices will result in capital gains, which will further boost investors’ optimism.”
The benchmark Hang Seng Index closed 2020 down 3.4 per cent against 2019. Mutual funds also decreased by 0.9 per cent. Retail deposits were a rare outlier, registering high net inflows in 2020, their highest in a decade, as heightened volatility and uncertainties in other riskier asset classes made them attractive by comparison.
“Despite several challenges brought about by the pandemic, Hong Kong’s wealth management market has remained mostly resilient and is now all set to rebound,” Sharma said. “The strong predicted retail investment growth is expected to benefit the investors and will further push the rise of affluent individuals over the next four years.”
