HSBC has reacted strongly to retail customer demand in New Zealand by launching four new funds, entirely focused on Emerging Markets. The four NZ$ denominated funds in which customers can invest are the China Fund, India Fund, BRIC Fund & the Asia ex Japan Fund. New Zealand investors have been looking for opportunities to take advantage of the phenomenal growth in emerging markets where we have seen EEM, EWZ, FXI & IFN realising returns between 41% – 70% year to date. These markets are widely acknowledged to be the fastest growing in the world.
“We are delighted to make this further investment in our business in New Zealand.” said New Zealand CEO, David Griffiths “This expansion of our offering also helps to further deepen our position within New Zealand.”
Last year, HSBC relaunched their Premier Banking service in order to offer Global Unit Trust products to retail investors in a number of territories. The strategy would seem to be paying off, as it allows customers to indulge in investing into new & emerging markets via the existing HSBC global network of 86 countries.
“We are excited to be a part of bringing the funds to New Zealand investors” said HSBC’s CEO Asia-Pacific Rudolf Apenbrink “providing them with the opportunity to invest in emerging markets that may typically be difficult to enter.”
The “broader reach” of HSBC would seem to be paying dividends for the bank when compared to its peers. Barclays Capital H1 2009 profits almost doubled to $1.35bn whilst HSBC Global Banking & Markets reported record H1 profits of $6.2bn against $2.7bn last year, an, encouraging seven fold increase on H2 2008. Asia contributed about 90 % of the group’s profit in the first half.
Meanwhile, HSBC is looking to be the first non-Chinese bank to gain a listing on the Shanghia stock exchange & has started the process for an IPO, timing is still unclear according to Vincent Cheng, Executive Director & Chairman for Asia-Pacific.
“Emerging markets’ contribution will account for about 60 % of the total after the U.S. market returns to profit. This is our target and, of course, we would not mind if the portion from emerging markets is bigger.”
As HSBC has a long history with & is inimically tied to Hong Kong, I can see it being able to achieve it’s aim, the choice of partner will remain open for some time. Amy successful IPO combined with the potential of Chinese retail investors to access HSBC’s global network, would have a massive impact on revenues & profitability. A big ask at the moment, but I for one will be placing a reasonable bet if & when the IPO gets clearance.