Wealthy investors in Hong Kong have decreased their allocations to Europe over the last five years, from 11.7% in 2010 to 7.2% in 2014, according to WealthInsight.
What’s more, they will likely further cut their level of investment in Europe over the next few years, to only 4.9% by 2019. In contrast, many Hong Kong millionaires are increasing their exposure to Latin American (currently at 11.5%) and Africa (currently at 3.1%).
Looking at other international regions, Hong Kong’s wealthy are most heavily invested in North America at 17%, as well as in the Middle East at 2.7%. Hong Kong’s foreign asset holdings are expected to reach about US$546 billion by 2019, accounting for 38.2% of the country’s total high-net-worth investment assets.
“Similar to China, [wealthy investors] in Hong Kong prefer to keep their investments closer to home, with nearly 60% of their foreign assets invested in Asia Pacific in 2014, largely in financial services sector,” says Roselyn Lekdee, economist at WealthInsight.
But some emerging markets have become more attractive, she adds, due to larger profit margins in their investment opportunities, particularly in areas such as infrastructure and impact investments.
A growing population
Hong Kong’s millionaire population is expected to grow over the next five years, with a forecasted growth rate of 15.6%. There would then be more than 230,000 millionaires by 2019.
The number of billionaires in the country is also expected to increase. Between 2010 and 2014, the number of billionaires rose from 34 to 53. That figure is expected to increase by a further 11 over the next five years.