Amid Market Rally, Hong Kong Fund Managers Eye Investment Opportunities in Middle East and Southeast Asia

Special Report | Amid market surge, Hong Kong fund managers target investors from Middle East, Southeast Asia

As the Hong Kong stock exchange experiences a surge in transactions, it's an opportune time for fund managers to seek fresh business prospects, according to Sam Yu from HKIFA.

International investment firms based in Hong Kong are considering selling equity products to investors in both the Middle East and Southeast Asia. This is due to a recent surge in the city's market, which has caught their attention, as per the recently appointed head of the fund industry organization.

The current positive trends in the market, combined with Hong Kong's position as a crucial link between China and the rest of the world, makes it an ideal time for Hong Kong's fund managers to seek out fresh business prospects in the Middle East and Southeast Asia, according to Sam Yu Chun-sing from the Hong Kong Investment Funds Association (HKIFA). He shared these insights in a one-on-one interview with the Post.

The stock market in Hong Kong has recently seen a lot of fluctuation, with the key Hang Seng Index experiencing a steep 9.4 per cent drop on Tuesday as investors cashed in their profits. This came after a surge of over 20 per cent following the US's decision to cut interest rates on September 18th and China's declaration of a series of stimulus actions to revive the economy. The market did regain some ground, however, with a 3 per cent rise on Thursday.

Yu emphasized that despite the fluctuations in the market, it's crucial to pay attention to the trading activity in Hong Kong's stock market. He highlighted Tuesday's record-breaking daily trading volume of HK$620 billion (around US$80 billion), a significant increase compared to the daily average of HK$113 billion over the first nine months of the current year.

"The significant churn suggests an increased number of market players and possible capital inputs from diverse international regions," he explained. "The reduction in interest rates and the central government's economic stimulation measures have strengthened the belief of investors in the future prospects of both Hong Kong and mainland stocks. Consequently, Hong Kong and China are now receiving heightened scrutiny from foreign investors."

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Extreme fluctuations in stock markets of mainland China and Hong Kong

The Hong Kong Investment Funds Association (HKIFA) boasts a membership of 106, encompassing some of the globe's most prominent investment firms like JPMorgan Chase, Fidelity, and Barings. In addition to this, Yu holds the position of chief compliance officer for the Asia-Pacific region, excluding Japan, at Barings Asia.