Wealth Management Connect revamp sent cross-border investment skyrocketing, says ICBC

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Improvements to the Wealth Management Connect scheme in February have proven to be a game-changer, with investment via the cross-border trading channel jumping by four times between January and April, according to government data and industry players.

The amount of money traded under the scheme quadrupled to 50.7 billion yuan (US$7 billion) in the first four months of the year, while the number of investors using it rose 60 percent to 110,000, according to government data.

ICBC Asia, a key user of the mechanism, has seen a fourfold increase in the number of customers opening accounts under the initiative and a tenfold leap in assets under management since measures to enhance it were introduced by Beijing, said Jimmy Jim Wai-kee, managing executive officer and head of the lender’s global market department.

“We were very happy to see the enhancements of the Wealth Management Connect scheme,” Jim said in an interview on the sidelines of the South China Morning Post’s China Conference on Thursday.

“People are really making use of the cross-border scheme to capture the opportunity offshore, namely in Hong Kong and in international markets. The demand is huge.”

Launched in 2021, the mechanism allows residents of Hong Kong, Macau and nine cities in Guangdong province to invest directly in designated wealth management products across borders.

However, sales were initially poor because of the pandemic, while tough restrictions and a limited choice of products also deterred investors.

New rules took effect on February 26 raising the individual investment quota from 1 million yuan (US$140,000) to 3 million yuan and adding yuan-denominated deposit products offered by mainland banks – moves viewed by lenders as creating more business opportunities.

Dubbed Wealth Management Connect 2.0, the new improved mechanism boasted a broader selection of sales products, including China equity funds. Jim said this was important because it enabled the bank to add more fund choices for investors.

He hopes to see the scheme further improved to strengthen the role of Hong Kong in capturing the growing demand from mainland investors.

“Given China has the highest amount of savings in the world, there is a lot of money. Hong Kong plays a very important role in connecting mainland investors with the world, as well as international investors with the onshore market,” he said.

Jim said the recent stock market rally in China and Hong Kong has also helped boost the trading link.

Hong Kong’s benchmark Hang Seng Index rose 7 percent in the second quarter, a rally triggered by the announcement by the China Securities Regulatory Commission in April that it would facilitate Hong Kong listings by leading mainland companies and expand the Stock Connect cross-border investment schemes.

Wealth management is a key focus of development for ICBC Asia, which has 47 branches in Hong Kong including 25 designated as “elite centres” servicing rich clients.

ICBC Asia is the Hong Kong unit of the mainland’s largest bank, the Industrial and Commercial Bank of China (ICBC), employing about 3,000 staff. Jim said it is working closely with its parent to expand in the Greater Bay Area and overseas markets.

“We look at every possible way to synergise to serve our customers, regardless of where they are. As part of the ICBC group, we can serve clients through the group’s global network including 20 countries in Africa,” he said.

“We help our customers to understand where the opportunities are and we can provide the right products for them to start their businesses anywhere in the world. Whether they want to go into China or if they want to expand out of China, we can serve them through the ICBC network.”

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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