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South China Morning Post
23-06-2025
- Business
- South China Morning Post
Global investors turn to Hong Kong funds for returns amid geopolitical tensions
Hong Kong's fund industry will continue to attract strong inflows as international investors use the city as a 'safe harbour' amid rising geopolitical tensions, according to officials and fund managers. Financial Secretary Paul Chan Mo-po said the Middle East offered huge opportunities for Hong Kong despite the recent flare-up in the region. On Saturday, the US joined Israel in attacking Iran's nuclear facilities, a move that threatened to destabilise the Middle East. 'The Gulf economies remain resilient and forward-looking, [and] many GCC [Gulf Cooperation Council] nations are advancing an ambitious diversification agenda, including financial market development,' Chan said in a speech on Monday at the Hong Kong Investment Funds Association's (HKIFA) annual conference, which was attended by hundreds of fund managers. Chan said the city's sound regulatory system and enabling government 'have reinforced Hong Kong's position as a safe harbour for global investors during these turbulent times'. 'This is most obviously reflected in the recent upturn in our stock market and influx of capital as reflected in bank deposits,' he said, adding that some US$44 billion worth of capital had flowed into Hong Kong-domiciled funds in the 12 months to the end of March, a threefold increase from a year earlier. Hong Kong managed nearly US$4 trillion in assets at the end of 2023.
South China Morning Post
18-06-2025
- Business
- South China Morning Post
China records bumper capital inflow as Gulf investors hedge against US
China has attracted a growing influx of capital from Middle Eastern investors seeking to diversify their US-heavy portfolios in recent months, but Beijing will need to further open up its financial markets to sustain the trend, analysts said. Advertisement Beijing announced on Tuesday that China had recorded a US$33 billion net capital inflow from non-banking sectors and higher foreign holdings of Chinese equities in May – an acceleration from April's US$17.3 billion inflow The department did not break down the figures by country, but analysts noted a growing trend for global investors – including large Gulf sovereign wealth funds – to pivot towards stable, high-growth markets in Asia amid rising global instability. 'It is possible that some funds have been withdrawn from the US market for safe-haven purposes and redirected towards major trading nations and countries with substantial overseas net assets, such as China,' said Sun Lijian, director of Fudan University's Financial Research Center in Shanghai. Washington's support for Israel amid an escalating regional conflict had left Gulf investors reluctant to put 'all their eggs in one basket', according to Sun. Advertisement The growing capital inflows into China also reflected the Gulf states' increasing confidence in China's opening-up policies and efforts to internationalise the yuan, he noted.
