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
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
×