Wealth managers head to Singapore amid Hong Kong concerns

Singapore is a preferred option for investors leaving Hong Kong. (Reuters)
Updated 28 June 2019
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Wealth managers head to Singapore amid Hong Kong concerns

  • Wealth managers looking to Singapore for new openings

HONG KONG: Some foreign wealth managers are scrapping plans to open offices in Hong Kong in favor of Singapore, as the rich begin to move funds from the Chinese territory where a new extradition bill has stoked public unrest, people familiar with the matter said.

A mid-sized European private wealth advisory firm has abandoned a plan to set up its Asia arm in Hong Kong and will instead aim to launch it in Singapore, its London-based CEO said.

“We have been watching the situation in Hong Kong for the last few weeks and what we are seeing there doesn’t give us much confidence,” he said on condition of anonymity.

“For me, the most important thing is stability for clients because you don’t want to invest
$1 million to $2 million to set up operations and then one day you need to shut it down because your clients don’t feel safe to operate in that market.”

Some Hong Kong tycoons have begun moving their personal wealth offshore as concerns deepen over a government plan to allow extraditions of suspects to face trial in China for the first time.

FASTFACTS

•Move comes as some HK tycoons start moving wealth offshore. •Singapore property brokers are seeing increased inquiries. •Real estate attractive investment asset class for wealthy Asians

The bill, which would cover Hong Kong residents and foreign and Chinese nationals living or traveling through the city, has been suspended. But protesters are now demanding it be scrapped amid broad concern it may threaten the rule of law that underpins Hong Kong’s global financial status.

For the wealthy, a key worry is that Beijing may eventually be able to seize their assets, leading them to weigh moving their assets offshore. Wealth managers mostly go where their clients prefer to park their riches.

The uncertainty over the bill clouds the outlook for Hong Kong as a wealth management hub, one of the main pillars of growth in the former British colony, which has been losing ground to Singapore in recent years.

In a survey published by trade publication Asian Private Banker last year, 58 percent of the respondents ranked Singapore as the most preferred offshore wealth management hub, followed by Hong Kong and Switzerland, respectively.

The survey said Singapore had become particularly attractive because, compared with Hong Kong, it was “less connected to mainland China from a regulatory, political, and financial perspective.”

Rahul Sen, a London-based global leader for private banking at headhunter Boyden, said three of his multi-office wealth advisory clients decided in the past few weeks to hire teams of bankers in Singapore after initially considering Hong Kong.

“New teams that are being set up, they are asking why should they align with Hong Kong when the future of Hong Kong itself as an independent wealth hub is uncertain,” Sen said.

The head of Singapore’s central bank said on Thursday that there were no signs of “any significant shift of business or funds” from Hong Kong to Singapore.

Singapore property brokers, though, said they are seeing increased inquiries and visits from Hong Kong-based groups, including real estate fund managers and family offices, or private investment vehicles of the rich.

Ian Loh, head of investments and capital markets at Knight Frank Singapore, said the investors are looking at a range of properties, including offices and hotels, starting at about S$200 million ($148 million) and going up to S$500 million.

Real estate in Singapore is an attractive asset class for rich individuals due to its affordability and growth outlook.

Singapore prime office monthly rents climbed 24 percent on the year in Q1 2019 to hit $81.2 per square meter, according to research by Knight Frank. Rents in central Hong Kong rose
3.2 percent to $221 per square meter over the same period.

“The events of recent weeks are likely to add more momentum to a trend that has emerged over the last 18 months where Hong Kong-based private investors and family offices have been looking actively at Singapore property assets,” said Chris Marriott, CEO of Savills in Southeast Asia.

Some analysts said it remained to be seen if bigger financial institutions would move assets out of Hong Kong or bypass it.

“Singapore could be one of the beneficiaries as Hong Kong investors and high net worth individuals look to shift their funds out of Hong Kong,” said Jenny Ling, director of office services at Colliers International.


Huawei in public test as it unveils sanction-hit phone

Updated 19 September 2019

Huawei in public test as it unveils sanction-hit phone

  • Hit by US sanctions, Huawei's Mate 30 will not be allowed to use Google’s Play Store
  • Household-name services like WhatsApp, Instagram and Google Maps will be unavailable.
BERLIN: Chinese tech giant Huawei launches its latest high-end smartphone in Munich on Thursday, the first that could be void of popular Google apps because of US sanctions.
Observers are asking whether a phone without the Silicon Valley software that users have come to depend on can succeed, or whether Huawei will have found a way for buyers to install popular apps despite the constraints.
The company has maintained a veil of secrecy over its plans, set to be dropped at a 1200 GMT press conference revealing the Mate 30 and Mate 30 Pro models.
Huawei, targeted directly by the United States as part of a broader trade conflict with Beijing, was added to a “blacklist” in Washington in May.
Since then, it has been illegal for American firms to do business with the Chinese firm, suspected of espionage by President Donald Trump and his administration.
As a result, the new Mate will run on a freely available version of Android, the world’s most-used phone operating system that is owned by the search engine heavyweight.
While Mate 30 owners will experience little difference in the use of the system, the lack of Google’s Play Store — which provides access to hundreds of thousands of third-party apps and games as well as films, books and music — could hobble them.
Household-name services like WhatsApp, Instagram and Google Maps will be unavailable.
The tech press reports that this yawning gap in functionality has left some sellers reluctant to stock the new phones, fearing a wave of rapid-fire returns from dissatisfied customers.
Huawei president Richard Yu said at Berlin’s IFA electronics fair this month that his engineers found a “very simple” way to install the hottest apps without going via the Play Store.
Huawei could offer its own app store in a preliminary version, setting itself up as a competitor to the dominant Apple and Google offerings, observers speculate.
Over the longer term, the company could build out a similar “ecosystem” of devices, apps and services as the Silicon Valley companies that would bind users more closely to it.
The world’s second-largest smartphone maker after Samsung, Huawei earlier this month presented its proprietary operating system HarmonyOS, a potential replacement for Android.
The Mate 30 will not yet have HarmonyOS installed.
But it could make for a new round in the decades-old “OS wars” between Microsoft’s Windows and Apple’s Mac OS, then Android versus Apple’s iOS.
Meanwhile, Eric Xu, current holder of Huawei’s rotating chief executive chair, has urged Europe to foster an alternative to Google and Apple.
That could provide an opening for Huawei to build up Europe’s market of 500 million well-off consumers as a stronghold against American rivals.
“If Europe had its own ecosystem for smart devices, Huawei would use it... that would resolve the problem of European digital dependency” on the United States, Xu told German business daily Handelsblatt.
He added that his company would be prepared to invest in developing such joint European-Chinese projects.