Hong Kong stands to benefit from a potential reallocation of global capital as geopolitical tensions push investors to seek safer and more resilient markets, according to the Financial Services Development Council (FSDC), a government think tank.
Speaking at a media round table on Tuesday, FSDC chairman Benjamin Hung Pi-cheng said the prolonged conflict involving the US, Israel and Iran had reinforced a global environment of “turbulence and volatility”, prompting investors to reassess where to deploy capital.
“Against this backdrop, a lot of investors are seeking where in the world they can find good and resilient growth,” Hung said, adding that Asia-Pacific markets with strong industrial foundations had become key destinations. Hong Kong, as an international financial centre backed by mainland China, was well positioned to capture part of these flows, he added.
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Hung said that sentiment among US investors had become more open towards allocating capital to Hong Kong and mainland Chinese assets, compared with a year earlier, as part of a broader effort to “rebalance portfolios and diversify away from developed markets”.
This was also reflected in stronger market activity and rising participation by Western investors in major initial public offerings as cornerstone investors, Hung added.
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