Some finance professionals may be set to benefit from China’s stock slump, devalued currency and slowing economy: those who can help Chinese individuals and companies move money out of the country.
The equities collapse and the depreciating yuan are making rich Chinese clients more willing to diversify away from domestic investments, Tan Su Shan, DBS’s head of wealth management, told the Business Times. And recent moves to allow more international use of the yuan mean private bankers should now get ready for when wealthy people in China – a nation with more millionaire households than any country except the US – can freely move their money in and out of the country, she said.
“The process has started, in terms of getting ready for the internationalisation of the renminbi, and sooner or later the opening up of the capital account…That is a major game changer for us, or anyone doing wealth management.” DBS is studying ways to expand in China, including partnerships with Chinese institutions to give it greater access to the market, Tan told the Business Times. And as we reported earlier this year, private banks in China, including UBS, are building up their onshore teams with a view to eventually taking clients’ assets to Hong Kong.
Separately, the Wall Street Journal reports that outbound M&A may well continue apace in China, suggesting a healthy future for M&A bankers (working for banks or in-house for corporates) with experience of guiding Chinese companies through overseas acquisitions. The theory is that the current problems at home may well spur Chinese entrepreneurs to invest more abroad.
“We still see a lot of Chinese companies interested in making overseas acquisitions driven by a desire to diversify their markets or acquire technology,” John Kim, head of Asia ex-Japan mergers and acquisitions at Goldman Sachs, told the WSJ. Kim pointed to Japan, whose outbound M&A activities have increased substantially over the past 12 months despite a weakening currency.
Meanwhile:
Citic is now a much smaller firm than it was last week. (Bloomberg)
Market slump is a buying opportunity, says Credit Suisse Asia private banking boss. (Reuters)
Chandrima Das resigns from Bank of Singapore again. (Asian Investor)
Hong Kong DCM head Peter Szekely leaves Standard Chartered. (Finance Asia)
Big US banks can weather China storm. (Wall Street Journal)
Bordier & Cie Singapore boss designs office with glass walls to reflect his view that private banking is becoming more “transparent”. (Straits Times)
Meet the new breed of Asian family offices. (Finance Asia)
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