Hong Kong family offices embrace India’s growth story, diversify investments beyond China

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Amidst China’s economic challenges, a notable trend is emerging among Hong Kong family offices: a growing interest in diversifying their investments toward India, aligning with the global sentiment that sees India as a promising growth story in Asia.

William Chow, deputy group CEO of Raffles Family Office, expressed optimism about India’s potential as a strategic market alongside China. He noted that their firm has around 10 to 15 per cent of Indian exposure in their portfolio, primarily through stocks and exchange-traded funds.

India’s stock market capitalization recently surpassed Hong Kong’s, reaching US$4.33 trillion compared to Hong Kong’s US$4.29 trillion, making it the fourth-largest stock market globally. Despite a brief consolidation following a rally, analysts anticipate a positive outlook driven by India’s robust economy.

Moody’s raised India’s GDP growth projection for 2024 to 6.8 per cent from 6.1 per cent, citing stronger-than-expected data in 2023, particularly in manufacturing and construction. S&P Global Ratings predicts that India will overtake Japan and Germany to become the world’s third-largest economy by 2030.

However, investing in India’s stock market presents challenges, according to Marcus Wong, vice-chairman of WRise Wealth Management. Valuing Indian companies using traditional methods can be difficult due to different market metrics. Wong also mentioned that clients are exploring commercial property investments due to India’s booming economy.

Christopher Wood, global head of equity strategy at Jefferies, highlighted the potential growth of the Indian real estate sector, comparing it to where China was in 2005. Wood’s report, Greed & Fear, suggests that the Indian residential property market could experience significant growth in the coming years, similar to what happened in China.

In conclusion, Hong Kong family offices are increasingly turning their attention to India, viewing it as a promising investment destination alongside China, driven by India’s strong economic fundamentals and growth prospects.

(Source: SCMP)

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