The confidence of investors worldwide underscores Hong Kong's pre-eminence as an international financial centre (photo credit: IFC)

Its Fund Management Activities Survey shows the value of assets under management in the city surged by an impressive 22.8 per cent last year. The combined fund management business of licensed corporations and registered institutions (including asset management business, advisory business and other private banking business) amounted to HK$3,618 billion (US$466 billion) at the end of 2004, up from HK$2,947 billion (US$379.8 billion) in 2003.

"The above findings confirm Hong Kong's position as the Asian fund management hub for investors worldwide," said the SFC in a statement. 

In terms of assets under management, Hong Kong and Singapore are among the major asset management centres in Asia - following Japan - with Tokyo being a large centre for domestic fund management.

International standing

What makes Hong Kong stand out is its strong international orientation.

Funds sourced from overseas investors amounted to HK$2,269 billion (US$292 billion), or 63 per cent of total assets, the same percentage as in 2003 - testimony once more to Hong Kong's position as a major international financial centre.

"In addition to our close relationship with the mainland and our strong presence in Asia, we also keep our fingers on the pulse of the world," commented Clarie Lo, Deputy Secretary for Financial Services and the Treasury (Financial Services).

"Hong Kong is a highly international city. We have one of the world's most open, fair, advanced, efficient and transparent economies. Indeed, for the 11th consecutive year, Hong Kong is ranked as the world's freest economy in the Index of Economic Freedom published by the Heritage Foundation and the Wall Street Journal. These strengths attract international investors to invest in Hong Kong, and financial talent to work here."

The increase in the funds managed not only reflects Hong Kong's pre-eminence as an international financial centre in the region and thus its ability to attract funds for management, but also investors' optimism towards the financial markets in the region, the SFC said. It is also the direct result of the introduction of new investment funds and products, and increased participation in fund investment among the general public.  

Niche skills shine

Of the HK$1,466 billion (US$190 billion) assets managed in Hong Kong, 73 per cent or HK$1,066 billion (US$137 billion) were invested in Asia, including HK$537 billion (US$69 billion) invested in Hong Kong or in the Chinese mainland. These figures point to Hong Kong's niche skills in managing investments in Asia, something that remains vital in the city's ability to attract overseas funds for management.

"The remarkable growth of Hong Kong's fund management business underscores the breadth and depth of the Hong Kong market and its ability to bring together a critical mass of fund management talents to serve the needs of the international and domestic investors," said Mrs Alexa Lam, SFC's executive director of intermediaries and investment products. "The SFC will continue to position Hong Kong as an international financial centre, a regional hub for Asia and the capital market for the mainland."  

To illustrate the importance of the industry, the size of Hong Kong's fund management business as at end 2004 was 54 per cent of Hong Kong's stock market capitalisation (HK$6,696 billion or US$863 billion) as at the same date.

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