Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Hong Kong’s wealthy build cash piles as protests deepen

Hong Kong’s wealthy build cash piles as protests deepen

Rich residents’ cash holdings at highest level in a decade as recession fears grow
Hong Kong’s wealthy residents have boosted their cash holdings to multiyear highs as the trade war and political unrest fan fears of recession.

Rich individuals in the city are holding close to a third of their total holdings in cash, a level not seen since the 2008 financial crisis, according to consultancy Capgemini.

Hong Kong’s family offices — the advisers that invest the wealth of the super-rich — have also turned to cash, with holdings at 12-14 per cent, according to research from UBS’s wealth management division and data provider Campden Wealth.

That is the highest level since the survey was launched in 2015 and is “considerably higher than the global average”, said Enrico Mattoli, head of Global Family Office in Greater China at UBS Wealth Management.

Dr Rebecca Gooch, director of research at Campden Wealth, said: “Family offices are cautious about geopolitical tensions, and there is a widespread sense that we’re reaching the end of the current market cycle.” Of the Hong Kong family offices surveyed, 56 per cent anticipate a recession next year.

Hong Kong’s economy grew at its slowest annual pace since the financial crisis in the three months to June — figures that did not yet capture the impact of the unrest, prompting some analysts to predict that recession was imminent.

For investors already grappling with the impact of the US-China trade war, Brexit and tension in the Middle East, Hong Kong’s pro-democracy protests were “another straw on the camel’s back”, said John Woods, chief investment officer for Asia Pacific at Credit Suisse.

Demonstrations in the city have rumbled on for 19 weeks, with authorities failing to contain a movement organised around the kung-fu principle “be water”. Investors, as a result, have one more reason to be liquid, according to wealth managers.

In its most recent survey of Hong Kong residents with more than $1m in investable assets, in the first quarter of this year, Capgemini found that cash made up 30.3 per cent of portfolio allocations, overtaking equities — at 28.7 per cent — for the first time since 2015. Those weightings echo trends last seen in 2008, a year in which global stocks took a beating.

The proportion of cash holdings will probably have grown further over subsequent quarters this year, with wealthy investors “gradually moving to other conservative allocations like alternative investments, cash, and fixed income”, said Chirag Thakral, deputy head of market intelligence at Capgemini.

Hong Kong’s stock market has struggled amid the street protests. The benchmark Hang Seng has lost 4.6 per cent since the end of July, when clashes between demonstrators and police took a violent turn. It is the world’s worst-performing developed market this year.

A fall in global bond yields — $13.69tn of which are now in negative territory — has also burnished the appeal of cash, according to wealth managers.

Institutional investors, too, also asking for “highly liquid solutions”, said Paul Sandhu, head of multi-assets quant solutions for Asia Pacific at BNP Paribas asset management. “They want something to hold on to until the time comes when they can invest.”
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
U.S. and Hungarian Officials Talk About Economic Collaboration and Sanctions Strategy
Technology Giants Activate Lobbying Campaigns Against Strict EU Regulations
Pope Francis Admitted to Hospital in Rome Amid Increasing Speculation on Succession
Zelensky Calls on World Leaders to Back Peace as Tensions Rise with Trump
UK Leader Keir Starmer Calls for US Security Guarantee in Ukraine Peace Deal
NATO Chief Urges Higher Defense Expenditure in Europe
The negotiation teams of Trump and Putin meet directly, establishing the groundwork for a significant advancement.
Rubio Touches Down in Riyadh Before Key U.S.-Russia Discussions
Students in Serbian universities Unite to Hold Coordinated Protests for Accountability.
US State Department Removes Taiwan Independence Statement from Website
Abolishing opposition won't protect Germany from Nazism—this is precisely what led Germany to become Nazi!
Transatlantic Gold Rush: Traders Shift Bullion in Response to Tariff Anxieties and Market Instability
Bill Ackman Backs Uber as the Company Shifts Towards Profitability
AI Titans Challenge Nvidia's Supremacy in Light of New Chip Innovations
US and Russian Officials to Meet in Saudi Arabia Over Ending Ukraine Conflict. Ukraine and European leaders – who profit from this war – excluded from the negotiations.
Macron Calls for Urgent Summit as Ukraine Conflict Business Model is Threatened
Trump’s Defense Secretary: Ukraine Won’t Join NATO or Regain Lost Territories
Zelensky Urges Europe to Bolster Its Military in Light of Uncertain US Backing
Chinese Zoo Confesses to Dyeing Donkeys to Look Like Zebras
Elon Musk is Sherlock Holmes - Movie Trailer Parody featuring Donald Trump's Detective
Trump's Greenland Suggestion Sparks Sovereignty Discussions Amid Historical Grievances
OpenAI Board Dismisses Elon Musk's Offer to Acquire the Company.
USAID Uncovered: American Taxpayer Funds Leveraged to Erode Democracy in Europe Until Trump Put a Stop to It.
JD Vance and Scholz Did Not Come Together at the Munich Security Conference.
EU Official Participates in Discussions in Washington Amid Trade Strains
Qatar Contemplates Reducing French Investments Due to PSG Chief Investigation
Germany's Green Agenda Encounters Ambiguity Before Elections
Trump Did Not Notify Germany's Scholz About His Ukraine Peace Proposal.
Munich Car Attack Escalates Migration Discourse Before German Elections
NATO Allies Split on Trump's Proposal for 5% Defense Spending Increase
European Parliament Advocates for Encrypted Messaging to Ensure Secure Communications
Trump's Defense Spending Goal Creates Division Among NATO Partners
French Prime Minister Bayrou Navigates a Challenging Path Amid Budget Preservation and Immigration Discourse
Steering Through the Updated Hierarchy at the European Commission
Parliamentarian Calls for Preservation of AI Liability Directive
Mark Rutte Calls on NATO Allies to Increase Defence Expenditures
Dresden Marks the 80th Anniversary of the World War II Bombing.
Global Community Pledges to Aid Syria's Political Transition
EU Allocates €200 Billion for AI Investments, Introduces €20 Billion Fund for Gigafactories
EU Recognizes Its Inability to Close the USAID Funding Shortfall Due to Stalled US Aid
Commission President von der Leyen Missing from Notre Dame Reopening Due to Last-Minute Cancellation
EU Officializes Disinformation Code for Online Platforms, Omitting X
EU Fails to Fully Implement Key Cybersecurity Directives
EU Under Fire for Simplification Discussions Regarding Corporate Sustainability Reporting
Shein Encountering Further Information Request from the EU During Ongoing Investigation
European Commission Initiates Investigation into Shein as It Aims at Chinese E-Commerce Regulations
German Officials Respond to U.S. Proposal for Peace Talks with Russia
Senate Approves Robert F. Kennedy Jr. as Secretary of Health and Human Services.
Trump and Putin Engage in Discussions on Ukraine Peace Negotiations Amid Worldwide Responses
Honda and Nissan End Merger Talks
×