The Hong Kong Monetary Authority is discussing with financial services industry stakeholders the possibility of expanding the cross-boundary Wealth Management Connect program with the Chinese mainland in areas like investment quotas, product types and the sales process, HKMA's Chief Executive Eddie Yue Wai-man said on Wednesday.

“Although the investment quota limit for individual investors has been raised to 3 million yuan ($414,200), it is not enough for private banking customers. We can consider exploring other channels to absorb funds from private banking customers,” he told the Bloomberg Wealth Summit in Hong Kong.

Yue believes that making the sales process smoother, strengthening marketing and improving investor education could be possible.

Although the investment quota limit for individual investors has been raised to 3 million yuan ($414,200), it is not enough for private banking customers. We can consider exploring other channels to absorb funds from private banking customers.

Eddie Yue Wai-man, Chief Executive of the Hong Kong Monetary Authority

The Cross-boundary Wealth Management Connect Scheme was launched in September 2021, allowing eligible mainland, Hong Kong and Macao residents in the Guangdong-Hong Kong-Macao Greater Bay Area to invest in wealth management products distributed by banks in each other’s market through a closed-loop funds flow channel created by their respective banking systems. 

The program was refined in January this year to expand the scope of participating institutions and eligible products and raise the individual investor quota.

Yue said following the enhancements, southbound business has seen considerable growth in the number of new customers or remittances. “The middle class on the mainland also need diversified investments. The wealth management connect program can provide simple and convenient investment products for these investors.”

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He said various measures launched by the HKSAR government, including providing tax incentives for single-family offices and the New Capital Investment Entrant Scheme, have brought new sources of funds to the local wealth management sector.

Bonnie Chan Yi-ting, chief executive officer of Hong Kong Exchanges and Clearing, suggested that companies listed in Hong Kong could be included in the stock connect program with the mainland – something that is unavailable on other exchanges. “Southbound capital flows have been very strong recently, reflecting the increased desire of mainland investors to diversify their investments. Hong Kong’s equity market is a convenient treasure hunt for mainland investors,” she said.

Chan believes the Hong Kong market is still an attractive listing platform for technology companies and those with large research and development expenditure, with the newly-promulgated Chapter 18C of the Listing Rules that can meet the needs of specialized technology enterprises.

Bonnie Chan Yi-ting, chief executive officer of Hong Kong Exchanges and Clearing, believes the Hong Kong market is still an attractive listing platform for technology companies and those with large research and development expenditure, with the newly-promulgated Chapter 18C of the Listing Rules that can meet the needs of specialized technology enterprises

She noted following the launch of Chapter 18A of the Listing Rules, Hong Kong, in just a few years, has become the world’s second-largest fund-raising hub for biotechnology companies, with more than 60 of them having gone public in the city.

She is confident the SAR can play a special role in supporting the financing needs of new economy companies, especially those that are unable to pay dividends.

Ronnie Chan Chi-chung, honorary chairman of Hang Lung Properties, said he is upbeat about the prospects of the mainland’s real-estate sector, believing it will be healthier and more sustainable.

Referring to the People’s Bank of China plan to set up a 300-billion-yuan affordable housing refinancing program to support domestic State-owned enterprises to acquire completed and unsold commercial housing at reasonable prices, he believes the central bank’s action alone would not be able to solve the problem.

The property titan also said the HKSAR government is now supplying land in a more reasonable manner, causing a drop in property prices due to adequate land supply.

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“The sharp drop in retail rents is a good thing for Hong Kong, allowing companies to provide better product experiences for tourists and local residents,” he said.