Analysis: HK to Remain Asia's Leading Assets Management Center

Hong Kong is to remain a leading assets management center of Asia, despite a sharp decline of the total assets under management in the past year, fund management analysts in Hong Kong believed.

According to a recent survey of fund management activities in Hong Kong released by the Securities and Futures Commission (SFC) Saturday, the total assets under management as of the end of December last year amounted to HK$1,485 billion (US$190 billion, a decrease of 57 percent from a year ago.

Analysts attributed the drop largely to the restructuring of a very substantial overseas registrant, and partly to lower equity prices and a generally more difficult business environment.

A fund expert from the SFC investment products department said that there are still encouraging signs that Hong Kong's status as a leading assets management center in the region was not eroded.

One of the major evidences to the conclusion was that the drop in total assets managed in Hong Kong was much more moderate than that of the total assets under management and in line with stock market falls in this region. It was recorded a smaller extent of 18 percent to HK$626 billion (US$80 billion).

Secondly, a SFC summary report showed that the number of fund management activities in Hong Kong increased to 203 from a 183 a year earlier, and the number of funds and other collective investment schemes authorized by the SFC reached 2,267 as of March this year, 26 percent higher than that of a year earlier.

On the retail funds side, eight more international or local firms became approved management companies under the Code on Unit Trusts and Mutual Funds since the beginning of 2000, with eight more applications awaiting approval, according to the report.

Thirdly, a larger proportion of total assets under management was managed in Hong Kong, about 27 percent of total assets attributable to Hong Kong investors.

However, the survey provides a snapshot of the state of the fund management industry in Hong Kong, showing that 2000 was a challenging year for practitioners. As a result, SFC experts called for efforts to understand the needs of the industry and to foster a friendly regulatory environment for local fund practitioners and to attract international business to Hong Kong.






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