26-9-2024 (HONG KONG) After a two-year hiatus, Hong Kong has reclaimed its position as Asia’s premier financial centre, surpassing its long-time rival Singapore, according to the latest semi-annual Global Financial Centres Index released yesterday. The index, compiled by the China Development Institute in Shenzhen and London-based think tank Z/Yen Partners, evaluates 121 cities worldwide.
In the global rankings, Hong Kong secured an impressive third place, trailing only behind the financial powerhouses of New York and London. Singapore and San Francisco rounded out the top five, underscoring the fierce competition among international financial hubs.
Hong Kong’s resurgence comes after a period of challenges, including stringent travel restrictions that were maintained until January 2023, whilst Singapore had eased its restrictions in April 2022. The city’s recent ascent can be attributed to a combination of factors, including a robust stock market performance and an influx of new listings.
Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, speaking at the 5th Belt and Road Initiative Tax Administration Cooperation Forum, highlighted Hong Kong’s strong performance across various sectors. “The Global Financial Centres Index ranked Hong Kong high in many areas, ranging from business environment to fintech and banking to wealth management,” Hui stated, emphasising the significant improvements in Hong Kong’s status as an international financial centre.
The revival of Hong Kong’s initial public offering (IPO) market has played a crucial role in its renewed status. This resurgence was bolstered by improved stock market sentiment and the China Securities Regulatory Commission’s April announcement supporting major mainland companies listing in Hong Kong. A prime example of this trend is the recent IPO of Midea Group, the world’s largest home appliance manufacturer, which saw its shares surge by 8 per cent on debut after raising US$4 billion, marking Hong Kong’s largest listing since 2021.
Further contributing to the positive financial climate, the US Federal Reserve’s decision to cut its key interest rate by half a percentage point last Thursday signalled the beginning of a monetary easing cycle. In response, Hong Kong’s commercial banks reduced their prime and deposit rates by a quarter-point. These actions, coupled with various measures announced by China, have provided additional support to the stock market.
The report also highlighted Hong Kong’s strengths in several competitive categories, including business environment, human capital, infrastructure, and reputation. Notably, the city claimed the top spot globally in investment management.
Financial Secretary Paul Chan Mo-po attributed Hong Kong’s strong performance to government initiatives promoting family offices, wealth management, fintech, and green finance. The city’s fintech capabilities were also recognised, with Hong Kong climbing five positions to secure the ninth spot in the global fintech rankings.
While Hong Kong celebrated its return to the top, other Asian financial centres also showed progress. Kuala Lumpur, for instance, made significant strides, boosting its rating by 13 points to reach 680, securing the 59th position globally.
