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
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×