Private Client Services in Hong Kong 2005: Industry Report

Private Client Services in Hong Kong 2005

Product Type: Market Research Report
Published by: Datamonitor
Published: September 2005
Product Code: R313-11863

Description

Introduction
Private Client Services in Hong Kong 2005 is Datamonitor's definitive guide to private client services in Hong Kong. Building on the resources and expertise of Datamonitor's Global Wealth Service team, the report is rich in analysis and provides in-depth and impartial market assessment, competitor intelligence and market forecasts.

Scope
The report sizes and segments the Hong Kong HNW sector and investigates the major competitive trends and issues affecting the market
Examines the products and services provided to HNW individuals such as private banking, private wealth management and private client stockbroking
Provides market forecasts to 2009, allowing the reader to understand both the current state, and future potential, of the HNW sector in Singapore
Highlights
In the last year the Hong Kong government has proposed changes to fundamental tax laws that could jeopardize its position as the region's premier fund center especially in light of Singapore's ascendancy.

Hana Bank's decision to launch a private banking service in Hong Kong targeted at Koreans is sound. However it is likely that the bank will need to tap into other areas in order to sustain growth, such as the substantial assets that flow offshore to Hong Kong from Korea.

Staff retention and training are issues that are being addressed in Singapore, more so than in Hong Kong.

Reasons to Purchase
The report provides comprehensive analysis of competitor developments in the Hong Kong private client market
The report enables strategic managers to determine the direction of the market and their position in its development
The report sizes the affluent population, enabling private wealth managers to determine their market share versus their competitors

Table of Contents

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 9

What is this report about? 9

Who is the target reader? 9

How to use this report 10

CHAPTER 2 MARKET OVERVIEW 11

Underlying macroeconomic conditions in Hong Kong were dismal over most of the 1999-2004 period 11

GDP growth was slow over the 2001-2003 period 11

Interest rates were lowered then raised in line with the US 11

The HKEX was shaken badly over the 1999-2004 period 12

Unemployment 12

Inflation 12

Retail wealth has not seen a great deal of growth 13

Despite dismal underlying conditions, growth in the Hong Kong wealth market is in evidence 14

Affluent individuals have increased in number 15

Affluent individuals owned a larger share of retail wealth in 2004 16

Data 18

CHAPTER 3 COMPETITIVE DEVELOPMENTS 20

The competitive landscape in Hong Kong is almost saturated with private client service providers 20

The locally incorporated licensed banks 20

The foreign incorporated licensed banks 21

The representative foreign banks 22

The asset managers 23

Hong Kong is an attractive fund market, but has recently anounced unpopular tax changes, which could prove self-destructive 25

Hong Kong is the most attractive hedge fund jurisdiction… 25

…and has now turned its attention to REITs 26

But recent tax law changes affected the island’s attractiveness 26

The attractiveness of the market for competitors is evidenced by four factors 27

Existing businesses have returned positive results 27

A number of businesses have announced expansion or refocus of private client services 29

Competitors are recruiting new staff 32

New competitors have launched 33

There have been very few retrenchments in the past year 37

CHAPTER 4 FUTURE DECODED 38

Following on from dismal historic macroeconomic conditions, the future looks good for Hong Kong 38

Underlying macro-economic forcasts are positive 39

Liquid assets of the wealthy will grow smoothly 40

Wealthy individuals will increase in number 41

The future will bring several key challenges for the domestic competitors 42

Staff retention will be key going forward 43

Competitors need to leverage their existing resources 44

Competitors must look for segmentation 46

Data 49

CHAPTER 5 APPENDIX 51

Definitions 51

AAGR 51

CAGR 51

Gini index 51

Liquid assets 52

Liquid asset bands 52

Research methodology 52

The Global Wealth Model 53

The UK sub model 53

Asia-Pacific sub model 53

Forecasting methodology 53

Datamonitor’s wealth numbers compared with others’ numbers 54

Bespoke Wealth Market Sizing 55

Further reading 56

Datamonitor Asia-Pacific Wealth Reports 56

Datamonitor Asia-Pacific Insight Reports 56

Datamonitor Global Wealth Service: Competitor Tracking 57

Datamonitor Financial Services Consulting 57

Asia-Pacific contacts 57

LIST OF TABLES

Table 1: Macroeconomic factors, 1999-2004 18

Table 2: Liquid wealth of individuals with liquid assets of more than USD1m, 1999-2004 18

Table 3: Number of individuals with more than USD1m in liquid assets, 1999-2004 19

Table 4: Locally incorporated licensed banks’ wealth services 21

Table 5: Foreign incorporated licensed banks’ private banking brands 22

Table 6: A selection of other private client service brands in Hong Kong 23

Table 7: A selection of asset managers catering to private clients either directly or though private banking institutions 24

Table 8: Key macroeconomic factors, 2004-2009f 49

Table 9: Retail liquid savings and investments, 2004-2009f 49

Table 10: Forecast liquid assets of individuals with more than USD600,000 in onshore liquid assets, 2004-2009f 50

Table 11: Forecast number of individuals with more than USD600,000 in onshore liquid assets, 2004-2009f 50

Table 12: Wealth markets that have been modeled using the Global Wealth Model 55

LIST OF FIGURES

Figure 1: Research methodology and report structure 10

Figure 2: Residential property prices have fallen dramatically since 1997 13

Figure 3: The factors underlying wealth creation in Hong Kong have been dismal on balance over the 1999-2004 period 14

Figure 4: The number of individuals with more than USD1m in liquid assets grew to 74,000 in 2004 15

Figure 5: Individuals with more than USD1m in liquid assets owned USD207bn in 2004, from USD146bn in 1999 16

Figure 6: The wealthier the individuals the larger the proportion of liquid assets they own 17

Figure 8: Forecast macroeconomic conditions look positive for Hong Kong 39

Figure 9: The liquid wealth of individuals with more than USD1m in liquid assets will grow at a rate of 6.4% over the 2004-2009 period 41

Figure 10: The number of individuals with more than USD1m in liquid assets will grow at a rate of 7.1% averaged annually, 2004-2009f 42

Figure 10: There are three ways in which a private bank can leverage group resources to attract and retain clients 45

Figure 11: The ‘Customer Value Framework’ 47

Figure 12: A possible segmentation scenario for the domestic banks 48

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