1. Anita Fung chief executive of HSBC’s Hong Kong operations, spoke about the debt capital markets in Hong Kong and China, including the dim sum bond market. Fung said the dim sum bond market is growing rapidly with Rmb213bn of issuances in 1H13 (+24% y/y) and attracting international issuers to Hong Kong. There is ongoing development of offshore Rmb infrastructure and gradual deregulation to allow two-way flows. There is large growth potential for China’s interbank bond market. China only accounts for 4% of global bonds outstanding, while the US accounts for 37% of global bonds outstanding.
2. Gao Yingxin, executive director and deputy CEO, BOCHK, spoke about cross border lending. He said non-bank China exposure accounts for 50% of system loans and continues to grow. Slowing demand for financing is in line with slower economic growth. Interest rate arbitrage opportunity between Hong Kong and China will disappear in the longer-term as interest rates are gradually liberalised. The Shanghai free trade zone will result in competition for Hong Kong, but also opportunity in the long-term as restrictions on Rmb lending and convertibility are removed over time.
3. Weber Lo, country officer & CEO, Hong Kong and Macau, Citi, spoke about wealth management. He said there is strong demand for wealth management services with fast accumulation of wealth in Asia relative to the rest of the world. He outlined that there are 4 million high net worth individuals (HNWI) in Asia-Pacific, with US$12trn of investible assets, of which Greater China accounts for a third. (HNWI are individuals with more than US$1 million of investible assets). There is intense competition, he said, with 45 banks offering private banking services (15 private banks have opened since 2009).
4. Sebastian Paredes, CEO, DBS Bank (Hong Kong), spoke about intra-Asia trade flows and financing. He said intra-regional trade flows have risen exponentially (14% CAGR over the past 10 years) and will continue to grow, supported by economic growth in China and removal of trade barriers. The number of free trade agreements within Asia currently stands at 150 and will continue to increase, he said. Hong Kong is well placed to be the intermediary of Asia’s trade flows as it already captures 50%-60% of trade with China and is the largest offshore Rmb centre. Large corporates look to create regional Treasury centers in Hong Kong and Singapore.