Bloomberg News reports that Hong Kong can still appeal to the finance stalwarts. However, as a future international dealmaking and trading hub, it is gradually waning.
Global Finance Summit
The central bank (de facto currently) of the Chinese territory is hosting, for the second time in a row, the global finance summit. The concept of the summit was first conceived in 2022.
The Objective of the Summit
The main aim of the same is to restore confidence following a series of restrictions related to Covid-19 and a political climate that is marked by tightening. The agenda from November 6th through November 8th is “Living with Complexity”.
As many as 300 executives are anticipated to be present at the summit. It includes Ken Griffin of Citadel, David Solomon of Goldman Sachs Group Inc., and James Gorman of Morgan Stanley.
The top executives visit the country when hundreds of people have been laid off from finance companies. Not just that, thousands of employees have emigrated as well.
What Will Keep the Stronghold?
There is one feature that still keeps the hope alive and that companies will ensure that there is a connection financially and economically with the Chinese mainland.
The financial sector of Hong Kong is being deeply integrated with the Greater Bay Area. This has led to it being tied closely to the Chinese area, with more than 86 million people.
Recent Job Cuts
UBS Group AG laid off around 7% of its workforce in the recent job cuts. The job cuts were from its banking division in Asia. Most of these roles were China-focused based in Hong Kong.
In June, JPMorgan Chase & Co cut 30 dealmaking jobs in Asia, with the staff in China and Hong Kong taking the biggest hit. In Asia, the investment bankers had the worst payments since there was a financial crunch at least 10 years ago.
For first nine months, there were as many as 47 initial public offerings, as reported by Bloomberg News. This raised a total of HK$24.6 billion. The figure was 67% lower as compared to the year-earlier period.
What does Hong Kong’s Latest Economic Data Show?
The recent economic data of the country shows a rise in gross domestic product by 4.1% in the 3rd quarter. Although the figure did not meet the estimates, economists at Citigroup Inc. pointed out a rebound in the gross fixed asset investment.
The recovery is a typical function of Hong Kong’s confidence as a gateway to the Chinese markets. The economists revealed in a report that we still need to see whether the rebound is sustainable in the next quarter.
There is yet another risk that is looming large. It is the visible dependence of Hong Kong on mainland China. Many foreign investors are pulling a considerable amount of money out of the country. Also, a sluggish economy, coupled with geopolitical risks, has forced the banks to expand plans on the Chinese mainland.
