S'pore set to 'mop up much of financial business leaving HK

Republic's market poised to grow due to reforms and strong fundamentals, says EIU

- Angela Tan

Senior Business Correspondent Singapore is well placed to reap the benefits as nervy investors bail out of Hong Kong amid a wider shakeup among Asia's traditional financial centres.

The Economist Intelligence Unit (EIU) noted that these hubs are being shaped by geopolitical uncertainties, regulatory changes and varying levels of investor confidence across different markets.

Geopolitical developments have caused significant volatility in Asia's stock markets in recent years, prompting investors to reallocate their portfolios.

The EIU, the research and analysis arm of The Economist Group, believes geopolitical factors will continue to weigh on China and Hong Kong while capital markets in Japan and India will thrive over the next few years.

"Moreover, Singapore will mop up much of the financial business that is leaving Hong Kong," it added.

Hong Kong's stature as one of the world's foremost financial centres is eroding while China's crackdowns and protracted trade war with the United States have led to an exodus of foreign investments and financial experts, the EIU said.

The economic woes of mainland China, particularly in the real estate and technology sectors, have further undermined confidence in Hong Kong's market.

Funds raised from initial public offerings (IPOs) have fallen to a 20-year low in Hong Kong, with many companies shelving listing plans due to weak valuations and poor market sentiment, it said.