More international investors are expected to head to the Chinese mainland and Hong Kong this year, driven by the nation’s improved business environment and the city’s role as a bridge, industry heavyweights said at the Asian Financial Forum (AFF) on Monday.
During a panel discussion on global economic prospects, John Christopher Donahue, president and CEO of Federated Hermes, a Pennsylvania-based investment management firm, said in regard to the question about whether international investors will come back to the mainland and Hong Kong in 2025, “the short answer is yes”.
“Hong Kong provides a wonderful window into the mainland (where) there seems to be a better resurgence of both regulation and the attitude (towards regulation),” Donahue said.
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Antoine Gosset-Grainville, chairman of Paris-headquartered insurance corporation AXA, agreed that more international investors will return, as “Hong Kong offers a unique exposure to the growth on the mainland”.
He said this is particularly clear in the insurance sector, because many of his clients in Hong Kong are from the mainland, particularly in life insurance. Gosset-Grainville said he believes this trend will continue, and he will capitalize on the integration between Hong Kong and nine mainland cities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to drive business growth.
Bonnie Chan Yiting, CEO of Hong Kong Exchanges and Clearing Limited, pointed out that growing confidence among international investors is reflected in the Hong Kong stock market. In 2024, particularly the fourth quarter, many IPOs in the city saw “really strong participation from investors in the United States and Europe”.
Chan shared her experience from late September to early October when she organized roadshows in Singapore, the US, and Europe. Some investors had turned her down when she set up meetings, but during her trip, many of them reignited their interest in investing in the mainland and Hong Kong, because the city’s stock market surged in October, with daily trading volumes increasing by more than 220 percent on a yearly basis.
She said, “I don’t think (there will be) immediately a lot of investors that come back in full circle”, but the most important thing is that “they’re now doing homework (for a return)”.
A KPMG report in December showed that Hong Kong had 63 IPOs last year, raising HK$82.9 billion ($10.7 billion) — a 78-percent increase from 2023. The firm expects the Hong Kong market to rank fourth globally in terms of capital raised in 2024, climbing back into the world’s top five IPO markets.
As for the global economy in 2025, Ernesto Torres Cantu, head of Citi’s international business, said it would be “a year of solid growth”. But he noted this growth will vary by region, with some areas outperforming the average while others would fall below.
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He said he expects China and other parts in Asia to outgrow the rest of the world, because sectors that are regarded as new economy and are driving economic growth, such as artificial intelligence (AI), electric vehicles (EV), and robotics, “are happening in China and the broader Asia-Pacific region”.
According to forecasts from the International Monetary Fund (IMF), the Asia-Pacific region will grow by 4.4 percent year-on-year in 2025, while emerging markets and developing economies in the region are expected to see growth surpassing 5 percent.
“The region has become the most dynamic engine of expansion amid a backdrop of slowing global economic growth,” said Liu Haoling, vice-chairman of China Investment Corporation.
Contact the writer at irisli@chinadailyhk.com
