GBA wealthy investors cautious following raise of investment quota

On the Agenda

Residents of the Greater Bay Area (GBA) are expected to invest an average of approximately 710,000 yuan following the recent expansion of the cross-boundary Wealth Management Connect scheme, a figure significantly lower than the newly allowed individual investment cap of 3 million yuan.

This insight comes from a survey reported by The Standard, which highlights the cautious approach of investors despite the scheme’s enhancements, including a higher investment quota and broader investment options.

These expansions reflect a surge in available investment products since the scheme’s inception in 2021, with banks now offering hundreds of investment options, including mutual funds focused on Asian or global markets.

According to data from the Guangdong Province branch of China’s central bank, the scheme has attracted 46,000 investors from Macau and Hong Kong Macau and 25,000 from the mainland as of January.

Conducted by the Hong Kong and Shanghai Banking Corporation, the survey polled over 2,000 GBA residents across 11 cities between January and February of this year, revealing that about two-thirds of respondents are motivated by the improved conditions of the scheme to either commence or increase their investments. These investors are targeting an average annualized return of 7.7%.

A notable 24% of those surveyed, either already investing or interested in the scheme, plan to allocate over 1 million yuan in sectors like energy, technology, natural resources, biotechnology, and finance within the next year.

In response to the growing interest and expanded scheme, banks including HSBC, Standard Chartered Hong Kong, Bank of China (Hong Kong), Hang Seng Bank, China Citic Bank International, and Dah Sing Bank have significantly increased their wealth management product offerings.