Table of Contents
Executive Summary
The Hong Kong wealth market remains highly appealing
Key findings
Critical success factors
Sizing And Forecasting The Hong Kong Wealth Market
Hong Kong remains a leading offshore center
After a step back in 2015, mutual fund holdings will experience growth from 2017 onwards
Retail and institutional investors share Hong Kong offshore deposits market holdings
The onshore wealth market will continue to grow at a reduced rate
In Hong Kong, HNW individuals represent 1.72% of the total adult population
Affluent individuals hold 93.18% of total liquid assets in Hong Kong
Drivers Of Growth In The Hong Kong Wealth Market
Hong Kong's retail investment market will perform strongly over the forecast period
Retail savings and investments growth will continue to support wealth creation
Investors in Hong Kong are strongly biased towards deposits
Positive growth is forecast for all asset classes over 2016-20
Deposit growth will continue to outstrip GDP growth
2017 will see off challenges to Hong Kong's economy
Interest rates will rise, but gains will be low once inflation is factored in
Bond holding growth will match average wage growth through 2017-20
The Government Bond Programme will stimulate further bond growth
Equities and mutual funds are most allied to the performance of the Hong Kong stock market
Hong Kong's stock market has performed poorly in recent years, giving little capital appreciation to long-term investors
Despite disappointing stock market performance, equity and mutual fund holdings experienced strong growth
HNW Investment Preferences
Investments in alternatives are on the rise
Price appreciation is the main driver for investments in property
REITs are leading the increase in alternative investments
Half of Hong Kong HNW assets are held offshore
Wealth managers should improve their international operations services
Access to better investment options and the expectation of better returns overseas are the biggest drivers of offshore investment
Tax efficiency is no longer a main driver for offshoring wealth
The largest share of Hong Kong's HNW offshore wealth is booked in the US
Appendix
Abbreviations and acronyms
Supplementary data
Definitions
Affluent
Domicile
DTC
FATCA
HNW
Liquid assets
Bonds
Cash
Deposits
Equities
Mutual funds
Mass affluent
Mass market
Onshore
Residency
Exchange of information
TIEAs
Methodology
2016 Global Wealth Managers Survey
GlobalData's Global Wealth Model methodology
Global Retail Investments Analytics methodology
Exchange rates
Bibliography
Further reading
About GlobalData
Disclaimer
List of Tables
Table 1: Net chargeable income tax rates in Hong Kong, 2009-10 to 2016-17
Table 2: Standard tax rate scenarios, 2016-17
Table 3: AVD rates
Table 4: Stamp duty as per property lease
Table 5: Stamp duty on transfer of Hong Kong stock
Table 6: Total Hong Kong adult population by asset band (000s), 2011-15
Table 7: Total Hong Kong adult population by asset band (000s), 2016e-20f
Table 8: Total Hong Kong onshore liquid wealth segmented by asset band ($bn), 2011-15
Table 9: Total Hong Kong onshore liquid wealth segmented by asset band ($bn), 2016e-20f
Table 10: Hong Kong dollar-US dollar exchange rate, December 31,2015 and December 31, 2016
List of Figures
Figure 1: Retail non-resident holdings amounted to $178bn at the end of 2015
Figure 2: Non-resident retail offshore deposits constitute an ever-growing element of the Hong Kong market
Figure 3: Almost 60% of Hong Kong's population can be considered affluent
Figure 4: HNW and mass affluent individuals hold 93.18% of total Hong Kong liquid assets
Figure 5: Hong Kong's retail savings and investments will grow at a stable rate
Figure 6: Deposits dominate the Hong Kong retail wealth market
Figure 7: Deposits will continue to drive growth up to 2020
Figure 8: Deposit holdings growth is forecast to significantly exceed GDP growth
Figure 9: Bond holdings are forecast to experience moderate but stable growth
Figure 10: The performance of the local stock market has been weak in recent years
Figure 11: Direct equity investment growth rates experienced a notable decrease in 2015 and are forecast to remain low
Figure 12: REITs dominate investments in property
Figure 13: HNW individuals in Hong Kong currently hold 50.4% of their assets offshore
Figure 14: Access to better investment options is the biggest motivation for offshore investment
Figure 15: The US, the UK, and China are the go-to markets for offshoring wealth
Figure 16: Hong Kong has signed a range of DTCs and TIEAs
