Category: Finance

China’s massive wealth creation in recent years has yielded a new generation of sophisticated high net worth (HNW) investors seeking expert guidance on how to grow and protect their wealth in a volatile global environment. Currently the world’s second largest wealth management market, China is expected to be home to around 80 million individuals whose wealth exceeds US$1 million by 2035, up from 17 million today¹.

Against this backdrop of rapid wealth accumulation, HSBC is bringing its comprehensive capabilities and global network to meet the needs of China’s entrepreneurs and their families. HSBC Global Private Banking (GPB) offers an extensive range of wealth management offerings to its clients across Asia. Tapping on the HSBC Group’s expansive breadth of services, the private bank is able to fulfil most of its clients’ wealth needs through the group’s robust commercial, retail and investment banking arms.

Meanwhile, HSBC’s global presence, spanning 62 countries and territories, with over 13 GPB booking centres, enables the bank to connect its clients to opportunities around the world. Clients also benefit from exclusive insights and research from the group’s investment research capabilities.

To provide its HNW clients with expert advice and guidance, HSBC GPB has assembled a team of dedicated relationship managers, investment counsellors, product specialists, and wealth planners who provide a wide range of bespoke investment and non-investment wealth solutions for individuals and family offices. Furthermore, the bank’s Global Relationship Managers (GRM) situated in major financial centres are able to offer Asian clients a seamless experience worldwide. These GRM teams consist of frontline colleagues who can effectively communicate with clients from the region and cater to their global needs.

“Our competitive advantage lies in being able to leverage HSBC Group’s global connectivity and breadth of capabilities. Our dedicated Asia coverage teams in key wealth hubs around the world can offer comprehensive solutions to support the wealth journeys of our clients,” says Jackie Mau, Head of Global Private Banking, HSBC China.

Supporting Legacies

Another key trend poised to shake up the market is the looming inter-generational wealth transfer set to take place over the next decade. There is an urgent desire among HNW and ultra-high net worth (UHNW) individuals to secure their legacies and transfer their wealth to the next generation.

With over 75 years of experience in Asia and globally, HSBC Trustee has been working with families around the world to address the complex issues of succession planning and wealth transfer.

“The expertise of HSBC’s trust and fiduciary services is particularly beneficial for our clients, who often have complex, multigenerational wealth management needs. Our well-established trust structures offer not just the security of asset preservation, but also the sophistication of efficient wealth transfer and tax planning,” says Bryce Wan, Market Head of North Asia, HSBC Global Private Banking.

The bank is also able to assist its UHNW clients in Asia in establishing family offices and facilitating knowledge-sharing experiences between well-established and newly set up family offices across markets. “Our synergistic approach between onshore and offshore services allows us to deliver a superior client experience,” says Wan.

Growing from Strength to Strength

Going forward, HSBC GPB will continue to invest in its capabilities and network in Asia. As wealth creation in the region outpaces the rest of the world, the bank will work towards bringing its wealth management expertise and client service capabilities closer to its clients.

HSBC will also continue to enhance its Chief Investment Office and investment capabilities to ensure that its clients are well advised to navigate market fluctuations amid an increasingly uncertain environment. The bank’s growing digital capabilities will further enhance the customer experience, providing clients with various platforms to interact with their wealth managers.

Furthermore, HSBC GPB will foster greater synergy between its local and international teams in Asia, and proactively acquire talent as it scales up its presence in the region. By expanding both local expertise and global reach, HSBC is strategically positioning itself as an essential partner for HNW and UHNW individuals and families in Asia.

And as one of the most compelling wealth markets in Asia, China is a critical part of HSBC’s strategy to become the leading private bank for Asian, international and HSBC-connected clients. Says Mau: “With our global scale, financial strength and personalised services, HSBC Global Private Banking is well-positioned to serve as a trusted partner to Chinese clients, helping them achieve their wealth goals over generations.”

¹ Source: The Rise of Asian Wealth, HSBC Global Research, August 2022

India’s remarkable economic growth and rising affluence have positioned it as one of the world’s most compelling wealth markets, with the number of ultra-high net worth (UHNW) individuals in the country—those with more than US$30 million to invest— predicted to increase by 58% by 2027. Reflecting the country’s economic dynamism, India surpassed the U.K. as the world’s fifth largest economy in 2022, and is expected to overtake Japan and Germany by 2027-28.

This rapid accumulation of wealth has fuelled demand among the country’s affluent for sophisticated financial solutions to meet their increasingly diverse and complex needs. For instance, many are diversifying away from traditional savings to a broad range of high return investment products, and also seeking protection and health-related solutions.

This need for comprehensive wealth services is shared by the 32 million nonresident Indians living abroad in regions such as the Middle East, the U.S. and the U.K. As one of the world’s largest migrant populations, the Indian diaspora has expanded its affluence and influence around the globe. Interestingly, HSBC Global Research has found that these “global Indians” are keen to invest in their resident markets as well as back in India.

A Trusted Partner at Home and Abroad

With the launch of HSBC’s Global Private Banking business in India, the bank will be able to leverage its deep local knowledge, international network and breadth of expertise to meet both the private wealth and business needs of the country’s UHNW professionals and entrepreneurs, as well as their families.

Many consumers recognise HSBC as a trusted financial partner in India, where it has been present for 170 years offering a full range of financial services for individuals, companies and institutions. The addition of the Global Private Banking business further reinforces HSBC’s commitment to invest and grow its business in the country, as it strives to become the leading international wealth manager in Asia.

Beyond private banking, HSBC Group has been strengthening its capabilities in India in other areas. These include the formation of HSBC Mutual Fund following the acquisition of L&T Investment Management Limited in 2022, and enhancements to its digital, payments, lending and international banking services, and the provision of life insurance services through its joint venture, Canara HSBC Life Insurance Company.

“Our research suggests that India is the investment destination of the decade and beyond. Our Indian clients are financially knowledgeable and comfortable with technology. Those who have relocated from India exhibit a global perspective and are remarkably mobile. Our team of private bankers are equipped with deep technical expertise required to meet the growing financial needs of this sophisticated group,” says Sandeep Batra, Head of Wealth and Personal Banking, HSBC India.

“With the new Global Private Banking business, HSBC can now bring a broad range of tailored solutions and bespoke services alongside the bank’s leading wholesale banking capabilities to our clients in India. Alongside our strong private banking network across every major global wealth centre, including Singapore, the U.K. and the UAE, we can also leverage our international connectivity to reach the global Indian diaspora so that we are where they are,” says Annabel Spring, CEO, Global Private Banking and Wealth, HSBC.

In particular, the Global Private Banking business offers a comprehensive suite of solutions, from bespoke lending and portfolio management services to investment products and wealth solutions.

With a presence in 62 countries and territories, HSBC Group also offers its Indian private banking clients access to international banking, investments and financing solutions across the group, enabling them to capitalise on global opportunities. These services are collectively delivered through a team of dedicated relationship managers, investment counsellors, and product specialists supporting wealth planning for individuals and family offices.

Furthermore, Global Private Banking clients can seamlessly access relevant HSBC Group’s solutions internationally.

Scaling Up Capabilities in Asia

Looking ahead, HSBC Global Private Banking will continue to invest in its people, capabilities and network in India and the rest of Asia. As wealth creation in the region outpaces the rest of the world, the bank will work towards bringing its investment expertise and client service capabilities closer to its clients.

HSBC Global Private Banking’s comprehensive digital services will further enhance the customer experience, providing clients with various convenient platforms to interact with their wealth managers. HSBC’s investments in enhancing its digital capabilities have been widely recognised by the industry. The bank was recently honoured with several awards in this space, including an award for Customer Facing Digital Capabilities (South-East Asia) at the WealthBriefingAsia Awards 2023.

HSBC is also bolstering its capabilities in the financial hub of Singapore to more effectively meet the needs of non-resident Indians in the region. This underscores the bank’s commitment to serve the growing community of global Indians by leveraging Singapore’s position as a prominent international wealth centre.

Over the years, the historical ties and geographical proximity between Singapore and India have fostered strong financial links between the two countries. Indeed, nearly nine out of 10 global Indians have invested in Singapore, according to HSBC. As one of the world’s largest migrant populations, members of the Indian diaspora are not only keen to invest in India but also in their respective resident markets. Due to the country’s stable government, strong rule of law and government support for the financial sector, many have started gravitating towards Singapore in recent years.

The launch of HSBC Global Private Banking in India—following on the heels of similar launches in Thailand in 2021, as well as in Mexico, UAE, and Chengdu, Hangzhou and Shenzhen in mainland China in 2022—is just the latest effort by the bank to better support the wealth journeys of UHNW individuals and families in the world’s fastest-growing wealth centres, and it will be far from the last.

Says Annabel Spring: “India is key to our global growth strategy to become the leading private bank for Asian, international and HSBCconnected clients. With our global footprint and wide range of bespoke services, we are now, more than ever, strongly positioned to meet the increasingly complex needs of wealthy Indians at home and abroad, helping them to achieve their financial, business and family goals for generations to come.”

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Rising prosperity in Asia is leading the region’s increasing number of wealthy families to seek new opportunities globally as they aim to diversify their wealth. Four of the world’s five largest economies are forecast to be in Asia by 2030, ensuring more ultra-high net worth (UHNW) individuals will be looking for trusted partners who can guide them on their increasingly complex wealth journeys, both across geographies and investment styles.

As a leading adviser to Asia’s UHNW individuals, HSBC Global Private Banking is leveraging Singapore’s status as a key international hub to help its clients protect, preserve and grow their wealth and legacies across generations. Indeed, the city-state plays an important role in HSBC’s ambition to become the leading global private bank for Asia’s entrepreneurs.

The bank has won numerous awards for its strategy in recent years, including Best Private Bank in Asia-Pacific at the Asian Private Banker Awards for Distinction for two consecutive years, and the Best Digital Private Bank at the Asiamoney Private Banking Awards 2023 for its outstanding digitalised client experience.

“UHNW clients are looking for a trusted partner who can provide a holistic approach to wealth and multi-generational planning,” says Annabel Spring, CEO, HSBC Global Private Banking and Wealth. “And as a universal bank with a global network, we are well-positioned to play that role,” she says.

A Shifting Wealth Landscape
Asia’s growing ranks of UHNW individuals are increasingly demanding wealth planning solutions aligned with their values. In addition, many are professionalising their wealth management activities by creating family offices with more sophisticated management and compliance processes.

With an estimated US$15 trillion in wealth to be passed from one generation to the next by 2030, succession planning has also become a top priority for the wealthy in the region. HSBC Global Private Banking’s global client survey in 2022 revealed that 85% of families worldwide are already preparing the next generation to take over their businesses, with those in Greater China (90%) and the ASEAN region (86%) more active in planning for their succession compared with their peers elsewhere.

These families in Asia are investing in their businesses, health and sustainable future with broader horizons than ever. They increasingly look beyond the bottom line and seek to put purpose into their decision-making, and make philanthropy a notable tool for preparing the next generation to take over their businesses. The global growth in UHNW philanthropy reflects their desire to make a positive impact on issues like sustainability, gender parity, and equitable access to education and healthcare. The Asia-Pacific region is predicted to need US$1.5 trillion more each year to achieve the United Nations’ Sustainability Development Goals by 2030, which means global banks such as HSBC can help facilitate impactful partnerships.

Spring says: “As a leading wealth manager in Asia, we continue to advise and support our clients with solutions that fulfil their philanthropic goals to address societal needs.”

Meeting Sophisticated Needs
HSBC Global Private Banking is uniquely placed to meet the increasingly complex and evolving needs of its clients. With access to HSBC Group’s comprehensive offerings and global network, the global private bank offers clients a wide range of tailored solutions and services, encompassing wealth expertise, and access to HSBC’s services from its Commercial Banking and Global Banking and Markets arms. The Group has also recently launched HSBC Innovation Banking, following its acquisition of Silicon Valley Bank U.K. Limited, to improve how it serves entrepreneurs, as well as innovative and fast-growing firms.

Meanwhile, HSBC’s international presence, with Global Private Banking covering over 40 markets, enables its clients to explore opportunities around the world. Clients also benefit from exclusive insights and research from the Group’s investment analytics capabilities.

To provide expert advice and support across all its markets, HSBC Global Private Banking has assembled a team of dedicated relationship managers, investment counsellors and product specialists who assist with wealth planning for individuals and family offices. Meanwhile, the bank’s trust expertise garnered from over 75 years of experience working with families worldwide sets it apart from its competitors.

The bank’s deep understanding of Asia’s wealthy and the strength of its balance sheet enable it to provide bespoke financing solutions to lend against illiquid alternative assets, including substantial credit lines to family offices secured by private equity, hedge fund portfolios or trophy assets such as fine art collections.

“Our edge lies in our ability to leverage HSBC Group’s global connectivity and offerings. With deep local knowledge combined with dedicated Asia coverage teams in key wealth hubs around the world, the bank offers comprehensive services to address all aspects of our clients’ personal wealth and health journeys,” says Siew Meng Tan, Regional Head of HSBC Global Private Banking, Asia Pacific.

As UHNW clients become more tech savvy, they are increasingly looking for a digitalised, multi-channel customer experience. HSBC has made some of its innovative solutions from transaction banking available to its private banking clients, ranging from sharing investment insights through HSBC GPB Chat to eSignature, providing its clients with convenient access to their relationship managers wherever they are. HSBC is also expanding its online trading platform, which allows its private banking clients to connect with the latest market opportunities directly from their phones, including access to cash equities and exchange traded funds (ETFs) across 10 major financial markets, and foreign exchange spot and forward contracts in the 12 most active currency pairs. It is also the first in Asia to provide private banking clients with the ability to trade structured products via mobile devices.

Capturing Opportunities in ASEAN
With significant wealth and trade opportunities in the ASEAN region, Singapore is a critical part of HSBC’s strategy to become the leading wealth manager and international bank in the region. HSBC’s deep-rooted presence in six ASEAN markets puts it in a strong position to help clients capitalise on them.

“In Singapore, one of our key priorities is to help clients capture opportunities within the ASEAN region and beyond. We continue to see strong interest from across all corridors, including clients from Greater China with business interests in the region,” Tan says.

“Singapore is a natural destination for wealthy families given its multiple merits spanning strong rule of law, availability of professional talent, cultural similarities within a multi-ethnic society and a pro-business environment for many entrepreneurs,” she adds.

Reflecting its long-term commitment to the city-state, HSBC recently opened another new office in Singapore and aims to double its wealth business in the market by 2025. The bank will also continue to leverage Singapore’s unique position as a regional hub for wealth management, innovation and sustainability to meet its clients’ needs.

Growing Capabilities
As wealth creation in Asia outpaces other regions, HSBC Global Private Banking is focused on expanding its capabilities and offerings in key areas and markets. The recent launch of its global private bank in India and its growing presence in mainland China, Taiwan and Thailand demonstrate the bank’s commitment to serving clients in the region.

HSBC will also continue to enhance its Chief Investment Office and investment capabilities to ensure that its clients are advised to navigate market fluctuations amid an increasingly uncertain environment. For instance, the bank has introduced HSBC Prism Advisory, an investment advisory service that combines institutional-quality portfolio and risk analytics provided by BlackRock’s Aladdin Wealth™ technology with expert guidance from HSBC advisers to help clients navigate market complexity and make more informed investment decisions.

HSBC Global Private Banking’s extensive experience, broad range of tailored solutions and global network position it as the ideal partner for wealthy entrepreneurs seeking to build and preserve their legacies over generations. As the bank continues to invest in its people and platform in key markets, it remains committed to understanding the evolving needs of its clients and tailoring unparalleled support and advice in wealth planning, trust services, family governance and international banking.

Spring says: “With our expertise and comprehensive range of solutions, entrepreneurial families can confidently navigate the changing wealth landscape and thrive with their values and purposes for generations to come.”

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The Philippines’ wealth market has evolved over the years into a vibrant and globally interconnected ecosystem. As the economy has expanded, so too has the wealth of the nation’s families, creating a burgeoning class of sophisticated high net worth (HNW) and ultra-high net worth (UHNW) individuals.

This shift has been accompanied by a more global mindset among the country’s affluent. Wealthy Filipino families are no longer focused just on their own shores, but are extending their horizons internationally with investments, businesses and family members spread across the globe. Yet, these changing dynamics have resulted in a more complex set of financial needs; issues such as succession planning, international taxation and cross-border investments have become top-of-mind concerns for these families.

With its deep-rooted presence of 148 years in the Philippines, HSBC has long been a trusted partner to the country’s wealthiest families, guiding them through the intricacies of an evolving landscape. “As one of the leading international foreign banks in the Philippines offering a full suite of financial services and access to a global network, HSBC Global Private Banking (HSBC GPB) is well-positioned to support our Filipino clients across their entire wealth journey, encompassing their private, business and investment needs,” says Abhishek Mehrotra, Managing Director, Relationship Management, Philippines, HSBC Global Private Banking.

Providing Comprehensive Solutions

The wealth market in the Philippines is dominated by family-owned businesses, more so than in other Asian countries. These companies face challenges that extend beyond trade and business operations, encompassing areas such as investments as well as estate and succession planning.

HSBC GPB harnesses its deep expertise in advisory and trust solutions to help these families preserve and grow their wealth, and is also able to tap on HSBC’s strong commercial banking to support their clients’ business-related needs, including trade financing and working capital solutions. Furthermore, the private bank leverages HSBC’s international reach, spanning 62 countries and territories globally, to introduce clients to novel business opportunities around the world as well as provide access to liquidity events such as initial public offerings and mergers and acquisitions (M&As).

On the investment front, HSBC GPB utilises its comprehensive investment capabilities across multiple asset classes to meet rising demand by its clients for alternative investments, private credit and other emerging opportunities like ESG investments. HSBC believes the transition to a sustainable economy is a multi-decade investment opportunity as sustainable investments are no longer considered the choice of specialist investors and have become mainstream. To support its clients in their sustainability journey, HSBC GPB offers a full range of sustainable and impact investing solutions.

HSBC GPB’s family advisory service is another key aspect of its wealth management offering in the Philippines. The bank helps professionalise family office structures and governance, and organises wealth management, succession and investment activities for its clients. This service also offers flexibility for families to establish offices in various locations around the world, including key financial hubs like Singapore and Hong Kong.

Opening Doors to Global Opportunities

With an increasingly global outlook, wealthy families in the Philippines are also looking for support in their overseas endeavours, whether in their businesses or personal affairs. “Filipino clients have always been very global. Today, even if their businesses tend to be domestic in nature, their desire to go overseas is more pronounced than ever. So, an international bank with a truly global network and deep local understanding is very appealing for them,” says Mehrotra.

Henry Lam, Regional Head of Wealth Planning and Advisory at HSBC GPB, noted that the bank’s on-the-ground presence in markets around the world enables it to provide clients with valuable, real-world insights. “A lot of the advice that we bring to our clients is substantiated by our intimate understanding of those markets. If a Filipino client is keen to invest in India, for example, the beauty is that we have been present in those markets for a long time,” he says.

Supporting Succession Planning Goals

As the founders and leaders of successful Asian businesses begin handing over control to the next generation, many families are seeking guidance to engineer a smooth transfer of wealth. While addressing complex family structures is challenging in the best of times, the relatively larger size of Filipino families adds a layer of complexity that must be managed wisely to maintain family harmony.

To support their succession planning goals, HSBC advises clients through a structured dialogue process, with the aim of enhancing existing plans to accommodate evolving family dynamics. “Multi-branch and multi-generational families across a wide range of ages are not uncommon in the Philippines. Therefore, understanding individual perspectives is important in working with our clients to design a process for deciding each family member’s role when it comes to managing their family wealth. At HSBC, we start this process with advisory, helping the families understand and organise themselves and taking stock not just of their wealth and business, but also their philanthropic goals and human capital,” says Lam.

HSBC then employs its trust company, HSBC Trustee, for execution and ongoing support. With over 75 years of experience in Asia and client relationships spanning more than four generations, HSBC Trustee is well versed with managing family dynamics and supporting its clients in protecting and preserving their wealth across generations and geographies.

Going Big on Digital

As Filipinos are tech-savvy consumers, HSBC GPB is able to employ advanced digital capabilities to more effectively serve its clients by providing increased convenience and accessibility.

Among other solutions, the bank now offers virtual account opening and trading, accepts e-signatures and can hold secure online meetings with clients through HSBC GPB Chat. Meanwhile, HSBC’s Prism Advisory, a portfolio-based advisory and investment service, enables private banking and eligible retail wealth clients to manage risk and test their portfolios against different market scenarios by using data-driven insights and expert guidance to make informed decisions. However, understanding that client preferences remain deeply personal, HSBC equally stresses the role of its human relationship managers and wealth advisers in family discussions.

“Whether it’s an online trading facility, opening an account or exchanging investment ideas, every juncture of our engagement with the clients can happen virtually. That said, we are adopting a hybrid approach where we leverage the best digital tools, facilitated and delivered through intelligent human presence as their trusted advisers,” says Mehrotra.

Rising Ambitions

Going forward, HSBC GPB aims to expand its onshore presence in the Philippines, focusing on tier-two cities and growing its presence in non-Metro Manila areas. Furthermore, the bank intends to bolster its commercial banking capabilities to support clients with their international needs, M&As, advisory and capital market transactions, which would naturally lead to opportunities for the private bank.

In recognition of its success, HSBC GPB has won various industry awards in the Philippines, including the “Best International Private Bank in the Philippines” at the Asiamoney Private Banking Awards 2023.

Says Mehrotra: “As the Philippines’ wealth market continues to evolve and grow, HSBC stands ready to adapt, innovate and provide enduring solutions for the country’s wealthy families over generations.”

Thailand has emerged as one of Southeast Asia’s key markets, offering significant wealth and trade opportunities for businesses and investors alike. The Thai economy is expected to expand by up to 3.8% in 2023, up from 2.6% the previous year, according to HSBC Global Research. With a robust economy situated in the heart of one of the world’s most dynamic regions, the country is poised for further success in the coming years.

Recognising its huge potential, HSBC is strategically positioning itself to become a trusted partner to Thai customers across the entire spectrum of financial services. In particular, the bank aims to establish itself as the number one bank in Thailand for international inbound business, and the top international bank for outbound Thai corporates.

In the wealth space, HSBC Global Private Banking (HSBC GPB) has been actively enhancing its capabilities in Thailand to better serve the country’s swelling ranks of high net worth (HNW) and ultra-high net worth (UHNW) individuals and their families.

According to HSBC Global Research, wealth in Thailand is expected to grow by close to 60% in less than a decade, with the number of millionaires also expected to double within the same period. This growth represents the second-highest rate in the Asia-Pacific region, and is driving demand for wealth planning, investment diversification and international banking services.

To stand out from the competition, HSBC GPB is capitalising on its investment capabilities, international connectivity and universal banking model to cater to the needs of clients across their entire wealth journeys.

“As the first commercial bank in Thailand and one of the country’s leading international banks, HSBC has always been at the heart of financial innovation. HSBC GPB offers bespoke services, tailored to fit each client’s unique needs,” says Giorgio Gamba, CEO of HSBC Thailand.

“We are partnering with our clients to connect them to new opportunities within ASEAN and across our wealth hubs around the world. We uniquely combine deep local understanding, specialist investment expertise and unparalleled global presence to bring the best of all of HSBC to their families and businesses.”

Supporting Entrepreneurial Families
HSBC GPB is strategically positioned for success in Thailand. The establishment of HSBC Thailand’s Global Private Banking business in 2021 marks the bank’s second onshore business in Southeast Asia, following its first in Singapore. This expansion enables clients to access international capital markets by leveraging HSBC’s existing infrastructure, including its robust advisory services and investment methodologies in Asia.

This expansion of HSBC’s global private banking business in Thailand aligns with the bank’s broader strategy to become the world’s leading private bank for Asian and international clients. In particular, HSBC GPB aims to support entrepreneurial families in the region and beyond, partnering them to navigate international boundaries, embrace new ventures and plan for their future generations. This is especially relevant in markets like Thailand, where the majority of the country’s wealth is generated from family-run businesses.

Recognising the global nature of its clients’ endeavours, the bank taps on HSBC Group’s truly global connectivity that spans 62 countries and territories to meet their business, investment and family needs, while also attending to their lifestyle aspirations.

Furthermore, HSBC GPB understands that life is a journey marked by different chapters. The bank guides its clients as they transition or exit their businesses and embark on their next adventure, helping them shape a successful future that stretches beyond their entrepreneurial pursuits.

Another cornerstone of HSBC GPB’s approach is its focus on multigenerational wealth. The bank recognises the importance of preserving and transferring wealth across multiple generations, and equips all entrepreneurial families with the necessary tools and knowledge to facilitate a smooth transition of wealth. Whether it’s providing financial education to younger family members or devising robust wealth transfer strategies, HSBC GPB is here to help our clients to preserve and grow their legacies.

“In Thailand, succession is a significant factor related to wealth as the country has always seen a culture wherein wealth is passed from one generation to the next. For over 75 years, HSBC Trustee has been the partner in sustaining clients’ family wealth and legacy in Asia. We can support families to build bespoke wealth planning, trust and family governance solutions that extend across several generations,” says Saranya Arunsilp, Country Head of Global Private Banking, HSBC Thailand.

Growing Ambitions
Looking ahead, HSBC GPB has ambitious plans for its wealth business in Thailand. The bank aims to further strengthen its capabilities in the market to meet the growing and diverse needs of the HNW and UHNW segment.

“We continue to invest in Thailand where we are strongly positioned to meet the increasingly sophisticated wealth and international needs of our clients by delivering bespoke innovative wealth solutions, investing in our people and leveraging HSBC’s extensive network globally,” says Arunsilp.

As Thailand continues to prosper and attract global investors, HSBC’s dedication to building wealth capabilities in the country positions it as a prominent player in the region’s dynamic economy. With its global expertise and local insights, HSBC GPB is poised to capture the opportunities presented by ASEAN’s growth and emerge as the go-to partner for Thailand’s wealthy.

“In the two years since we set up our onshore business in Thailand, we have witnessed rising demand for sophisticated wealth planning and investment advisory solutions as our clients’ needs become more complex and global in nature,” says Gamba. He adds: “We are committed to helping clients, families and businesses grow, manage and preserve wealth, not only for this generation but for generations to come.”

2023 Outlook

The stage is set for Asia to outshine the Western economies in the second half of 2023. While the U.S. and Europe are late in their economic cycles, Asia is still growing strongly.

Due to the banking turmoil in the West, tighter bank lending will slow the growth of developed economies in the second half of the year. Despite a less rosy global outlook, big economies such as China, India and ASEAN can still experience a strong growth trajectory.

This resilience comes from the strength of the domestic consumption and pent-up investments for supply chain relocation. There should be more room for cyclical recovery in India and ASEAN for the rest of this year. With a healthy banking system, credit growth is going to be robust. Inflation in many of these Asian economies has peaked and will create a favourable monetary policy environment for the rest of 2023.

Rise of the Asian T-I-G-E-R

Over the past decade, China has been a key part of Asia’s growth story. Looking ahead, there is a need to look beyond China, and we could put some focus on India and ASEAN as well.

Over the past decade, India and ASEAN economies have undergone a healthy reset as they have deleveraged and continued to invest in infrastructure. As a result, Indian and ASEAN companies have developed resilient fundamental strengths and stronger balance sheets to thrive in the next decade.

The growth prospects of India and ASEAN will accelerate in the next decade since several factors that were not as strong decades ago are now stronger than ever.

Let’s use TIGER as an acronym to illustrate the growth factors in the region, where T stands for technology or the digital economy, I is for rising income of the middle class, G stands for green transformation, E is for energy infrastructure and R is for reforms.

T: Technology or Digital Economy

The pandemic has accelerated the internet economy of India and ASEAN, with digital adoption becoming mainstream. ASEAN’s digital economy is expected to accelerate and grow to US$330 billion by 2025; this growth is not by accident. ASEAN is home to more than 10 million online merchants, and e-commerce sales are on the rise, with revenues expected to reach US$150 billion by 2025.

Over in India, the adoption of digital technologies is boosting productivity. India’s digital economy recorded a growth rate of 15.6% between 2014 and 2019, 2.4 times faster than the growth of India’s real economy. The country’s online traffic usage is among the highest in the world. India’s Gen Z spends an average of 8 hours a day online while smartphone adoption is accelerating in rural areas. Against this backdrop, India would have the second largest group of online shoppers of around 500 million by 2030, with the e-commerce market estimated at US$350 billion.

I: Rising Income of the Middle Class

India has become the world’s most populous country with over 1.4 billion people. ASEAN, with 680 million people, is the third most populous after China and India. Both India and ASEAN have one of the best demographic dividends in the world with a rising working age population and increasing productivity. Almost half of their people are below 30 years of age and their sizeable labour force is estimated to peak only in 2045.

The rise in the working-age population will provide India and ASEAN with an abundant supply of labour, which will have a bearing on future investment and production potential.

G: Green Transformation

India aims to achieve net zero emissions by 2070 and meet 50% of its electricity requirements from renewable energy sources by 2030. The country has recently announced plans to increase the renewable energy target to 450 GW by 2030. To reach net zero emissions by 2070, the International Energy Agency estimates that US$160 billion per year is required across India’s energy economy between now and 2030. That’s three times today’s investment levels.

Similarly, ASEAN has set a target of 23% share of renewable energy in primary energy supply by 2025. ASEAN’s green transformation can account for more than US$1 trillion in annual economic opportunities. The resource-rich locations in ASEAN could be important beneficiaries of the decarbonisation megatrend as global demand for nickel—critical in electric vehicles battery production—accelerates. Indonesia is the key beneficiary as the country has the world’s largest nickel ore reserves, accounting for a quarter of global production.

E: Energy Infrastructure

India and ASEAN will experience a population surge in the next decade, putting more stress on existing urban infrastructure. Cities are a key contributor to climate change, responsible for 75% of carbon emissions, with transport and buildings being the largest emitters. Smart building solutions, such as efficient energy usage, can unlock cost savings.

However, to combat climate change, the future of transport has to be electric, which is currently insignificant at under 1% of market penetration globally. Over in ASEAN, Indonesia has an ambitious target of having electric vehicles make up 20% of the total vehicle production in the next five years.

India is expected to see greater exponential expansion for electric vehicles. The South Asian country has launched several initiatives to promote electric mobility, including the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which provides subsidies to buyers of electric vehicles, and the National Electric Mobility Mission Plan (NEMMP), which aims to put millions of electric and hybrid vehicles on the roads. In India, electric two- and three-wheelers will represent the lion’s share of the total electric vehicle fleet, as this category is most suited to rapid transition to electrification.

R: Reform

Make in India 2.0 is a game-changer with many economic reforms to enhance its manufacturing competitiveness. Economic reforms such as easing foreign investment rules, streamlining taxes and the promotion of Special Economic Zones have set the stage for India’s manufacturing upgrade.

Over in ASEAN, the implementation of the Regional Comprehensive Economic Partnership (RCEP) will further integrate trade and accelerate investments for the region. The RCEP will promote trade efficiencies across ASEAN, especially important as companies look for new locations to diversify supply chains.

Investment Strategy: Look Toward India and ASEAN

Investors have been looking at China for exposure in Asia. However, both India and ASEAN are shaping up to be a big part of Asia’s growth in the years ahead.

Due to the unique characteristics of the Indian and ASEAN economies, an allocation to both India and ASEAN can increase diversification for global investors. A key reason for the diversification benefit stems from the resilience of their domestic economies, where domestic companies are closely linked to their strong structural growth opportunities. In an environment where this growth is positioned to continue, choosing India and ASEAN as a means for diversification becomes an even more crucial consideration.

With strong growth potential, the rise of the digital and green economy and smart manufacturing, investors should consider a satellite allocation to India and ASEAN, in addition to a broad emerging markets allocation. Such a strategy would allow investors to capitalise on the region’s longterm growth potential for diversification and alpha opportunities in the global portfolio context.

Global investors cannot afford to ignore the roar of the new Asian economic Tiger.

 

About James Cheo

James Cheo is a member of the Global Investment Committee for Private Banking and Wealth Management and also a member of the Regional Investment Committee in Asia. In his role, he spearheads the development of investment strategies across all asset classes for global private banking and wealth management clients in Southeast Asia.

With his knowledge and wealth of experience, his investment views are frequently sought after, with appearances on notable financial media including BBC, Bloomberg, CNBC, and Channel NewsAsia.

Asia’s Growth Amid Downturn in Developed World

China’s faster-than-expected reopening and consumption-led recovery have provided a notable lift to Asian economies, supporting a broad-based improvement in manufacturing and services PMIs across the region. Given that China is the single largest trading partner of 16 major economies in Asia, its demand recovery helps mitigate the drag from the global downturn for Asian exporters. New orders in Asia have already recovered to expansionary territory in January and have continued to improve in the first quarter. The pace of new export orders contraction has slowed considerably in the Asian exporting economies.

Upside surprises from China’s manufacturing and services PMI data reaffirm that the economy is on track to stage a strong cyclical recovery in 2023. We expect China will deliver a speedy growth acceleration from 2.2% y-o-y in Q1 to 7.4% in Q2, 5.5% in Q3 and 6.9% in Q4, lifting full-year GDP growth back to 5.6% in 2023 from 3.0% in 2022. We expect China can overachieve the conservative 2023 GDP growth target of “around 5%” set at the annual National People’s Congress in March.

In contrast to the growth downturn in developed economies, which is exacerbated by the tightening credit conditions caused by the banking sector turmoil in the U.S. and Europe, Asia stands out as the only region that is expected to deliver growth acceleration to 4.7% in 2023 from 3.5% last year. Alongside China’s recovery, India’s service sector boom is reflected by the surge of its services PMI to 59.4 at a 12-year high in February, adding momentum to Asia’s resilient growth in these uncertain times. The recent market turmoil triggered by Silicon Valley Bank (SVB) and related banking events have added to the market uncertainty. We believe a systemic banking crisis should be averted but the market volatility may persist. We see the Asian markets as relative safe havens in the volatile markets.

Asian Banking Sector Resilient to Contagion Risks

Against the backdrop of heightened banking sector volatility in the U.S. and Europe, the Asian banking sector has stayed resilient to withstand contagion risks. Thanks to the robust capital adequacy ratios, liquidity positions, diversified business models and the broad and stable retail deposit base, Asian banks stand out as relative safe havens amid the sector uncertainty. In Hong Kong and Singapore, the total deposits have increased significantly. Asian banks do not have mismatch in asset and liability maturity because they have been prudently regulated after the 1997-1998 Asian financial crisis.

In our view, Asian banks have built strong capital buffers to resist recent volatility in the AT1 bond market, thanks to their much higher CET1 capital ratios versus regulatory requirements. In particular, mainland Chinese banks are insulated from the banking turmoil in the developed economies due to their domestic-oriented business portfolios and loan book. ASEAN banks are also well diversified across different industries and geographies within the region.

Positioning in Reopening Winners in China and Asia

We are fully overweight on China and EM Asia equities due to their resilient domestic fundamentals, positive growth outlook and attractive risk-reward profile. China’s policy pivot towards growth stabilisation is strategic and supported through multiple policy levers, and is less prone to U-turns than many investors seem to fear. China’s consumption-led recovery will not only support Asia growth but will also reduce the risk of a global recession.

Our high conviction theme on Asia’s reopening winners position in the beneficiaries of China’s speedy reopening and resumption of international travel. We favour quality leaders in travel, airlines, mass consumption, hospitality, food and beverages and Macau gaming sectors. China’s rapid reopening should lead to broadening of economic recovery; we like blue chip Chinese internet leaders which will benefit from the more supportive government policy, asset restructuring and fundraising opportunities, better growth outlook and improving consumer confidence. China’s accelerating housing recovery will boost demand for metals and construction equipment.

In Hong Kong, we see positive recovery outlook for the retail landlords due to expected improvement in occupancy rates, positive rental reversion and additional revenue from turnover rents. We think the insurance sector in mainland China and Hong Kong can benefit from a normalisation of activity levels, just as banks and stock exchanges can.

The ASEAN economies also emerge as major beneficiaries of China’s border reopening, as Thailand, Vietnam and Singapore are the top three travel destinations in Southeast Asia most favoured by mainland Chinese tourists. In Thailand and Vietnam, Chinese tourists made up about 30% of their overseas visitors before the pandemic. In Thailand, the government targets 5 million tourists from mainland China to visit the country this year, implying total tourist arrivals will almost triple 2022’s levels. According to the United Nations World Tourism Organization, last year the return of international visitors to Asia Pacific only reached 23% of pre-pandemic levels, setting the stage for a strong recovery to take place in 2023.

Green Transition and ASEAN Growth

Asia’s green transformation continues to be our high conviction theme, focusing on opportunities from the energy transition and independence, green infrastructure development and innovation of new energy vehicles technologies in the region. According to McKinsey, the addressable market size for green businesses in Asia is expected to reach between US$4 trillion and US$5 trillion by 2030, as sustainability is increasingly valued by various stakeholders, including investors, customers and employees.

China’s transition towards renewable energy and electric vehicles is well underway, backed by strong policy support and catalysed by the global energy crisis. During the March National People’s Congress, the government announced fiscal stimulus measures, including targeted tax cuts and fee reductions for green transition and exemptions of purchase taxes for new electric vehicles. Following the normalisation of construction activities post-Covid, our 2023 solar installation forecast for China is now at 120 GW, translating into robust growth of 38% y-o-y. On the other hand, energy storage is gaining traction, in particular batteries that are used in new energy vehicles and the renewable energy industry.

Apart from cyclical catalysts, the ASEAN economies ride on structural growth tailwinds in the next decade with the economic gravity shifting to Southeast Asia. Our high conviction theme on “ASEAN Tigers” captures secular growth opportunities in ASEAN consumption companies, infrastructure plays, banks and Singaporean REITs. ASEAN economies were supercharged by robust domestic demand and reopening tailwinds in 2022. We expect consumption to stay supportive of growth, though with a smaller impact given slowing global growth and base effects.

Asian Quality Credit for Resilient Carry Opportunities

As the Fed is stepping closer to the end of its tightening cycle, we see an improving outlook for the Asian credit market. We are bullish on the theme on Asian quality credit as we see an opportune time to switch from time deposits to high-quality credits to lock in yields at attractive levels. Within Asian fixed income, our duration preference remains short to medium, taking advantage of the inverted credit curve.

In terms of high-quality corporate bonds in Asia, we find a few sectors offering attractive investment cases, including high-quality Hong Kong corporate bonds which enjoy reopening tailwinds, Chinese technology, media and telecommunications (TMT) bonds on the back of normalisation in regulatory environment and Indonesian quasi-sovereign high-grade bonds given the country’s improving fundamentals.

Within the China property credit market, we continue to prefer higher quality issuers including the state-owned developers which have much stronger financial positions compared to privately-owned and highly geared developers.

About Fan Cheuk Wan
Fan Cheuk Wan is a member of the Global Investment Committee for Global Private Banking and Wealth and Chair of the Regional Investment Committee in Asia. Fan has 28 years of investment experience and is responsible for developing investment strategies and themes across all asset classes for private banking and wealth clients in Asia. With her investment expertise and wealth of market knowledge, her views are always sought after by the media, including Bloomberg TV, CNBC, Cable TV, NOW TV and Channel NewsAsia.

In an increasingly complex market environment, entrepreneurs are faced with challenges not just related to running their businesses, but also managing their accumulated wealth.

Customized Solutions for Different Entrepreneurial Needs

Partnering with the right private bank and wealth advisor is pivotal in setting up a path to success for their businesses and personal goals. With a customized and holistic wealth and legacy plan, be it guiding them through transitions such as liquidity events, or realizing their philanthropic aspirations, entrepreneurs are able to focus on their day-to-day business operations and success.

J.P. Morgan Private Bank clients are able to leverage the bank’s established global network, as well as access its comprehensive services in corporate and investment banking, commercial banking and asset management, giving J.P. Morgan Private Bank the capability to customize solutions for every stage of an entrepreneur’s business life cycle and private wealth journey.

Narrowing the Accessibility Gap

J.P. Morgan caters to the needs of established entrepreneurs who have accumulated substantial wealth, as well as startup founders beginning to make their mark on the business world. Unsurprisingly, the needs of these two groups differ greatly.

For example, startups are looking for connections and networks that can help take their businesses to the next level of growth, including funding needs. This goal is more challenging for enterprises led by women, who are faced with higher hurdles compared to their male counterparts.

A J.P. Morgan report found that women-powered businesses—defined as businesses founded and led by women—represent only 5.7% of around 15,000 high-growth businesses identified across Asia Pacific (APAC).

“The study confirms our observations that women are severely underrepresented in high-growth businesses in APAC. However, even when faced with the challenges of Covid-19, there has been an increase in the absolute number of women-powered businesses in APAC compared to five years ago, much more progress can be made to accelerate the pace of growth,” says Kam Shing Kwang, CEO of J.P. Morgan Private Bank in Asia and the Vice Chair of Investment Banking for Greater China.

“The year ahead will undoubtedly be challenging with a global economic slowdown looming. However, we are confident that as more women come together—through networks and government-aided initiatives—this statistic will continue to see an upward trend.”

The report aligns with our firmwide commitment to empower and fuel women’s ambitions by advancing financial equality at J.P. Morgan and in our local communities. This mission is driven by our global initiative called “Women on the Move,” formed in 2013 to support women in both their personal and professional lives.

“At J.P. Morgan, we are committed to playing our part in addressing gender equality—beginning with setting the tone from the top. In APAC, we have a number of senior women leaders who lead by example and help set precedent—and it shows, as The Private Bank leadership team in the region has equal representation,” says Kwang.

Jumpstarting Connections

The same study highlighted that entrepreneurs and leaders prioritize the importance of having a strong network that can help them build their expertise, as well as find champions and mentors to help them in their journeys.

“Starting a business is not easy. Many entrepreneurs have shared that the barriers they face as women, especially in certain sectors that are male-dominated, are significantly higher,” says Karen Tan, Head of Wealth Advisory for Singapore and Southeast Asia at J.P. Morgan Private Bank.

“At The Private Bank we leverage our global connections to bring together entrepreneurs to facilitate network building, linking them up with not just like-minded individuals in the entrepreneurial space, but also our client network and family offices who are keen to diversify their portfolios. We are committed to fuel the ambition and success of all women and support them in our communities—creating platforms to facilitate networking, knowledge and advice for women entrepreneurs, with the report’s focus on high-growth businesses in APAC.”

“At J.P. Morgan, we are committed to playing our part in addressing gender equality—beginning with setting the tone from the top. In APAC, we have a number of senior women leaders who lead by example and help set precedent—and it shows, as The Private Bank leadership team in the region has equal representation,” says Kwang.

Supporting Evolving Needs

J.P. Morgan advises entrepreneurs to help them grow and preserve their wealth, and provides support in important areas such as succession planning and philanthropy, offering sound and practical advice on creating a lasting legacy for them and the families, and the causes that they are passionate about.

“The needs of entrepreneurs tend to evolve over time with changes in their business and family circumstances. J.P. Morgan advises them over the course of this journey, helping them to think about their portfolios, their succession plans and giving back to the community,” says Tan. She notes that with longer life expectancies, women have an even greater need for support in their long-term wealth planning.

J.P. Morgan does this with its differentiated “goals-based” planning approach to help entrepreneurs manage their wealth over their lifetimes, as well as craft strategies for wealth transfer to the next generation. This involves determining what a client wants to achieve with their wealth, who could be best suited to take responsibility for its management, how assets should be held and how to prepare them for any future transfer.

J.P. Morgan’s global connectivity and universal banking capabilities also ensure that The Private Bank is able to serve its clients’ business and personal wealth needs across multiple geographies. For instance, the Bank has a dedicated team, 23 Wall, that provides the world’s most prominent families with access to the firm’s entire intellectual capital, balance sheet and deal flow around the world.

These capabilities are also backed by the firm’s fortress balance sheet, which helps to assuage any concerns over security and safety in an uncertain environment.

Investing for Future Growth

J.P. Morgan prioritizes investing in talent and technology to ensure the effective and efficient solutions and services are available to entrepreneurs around the world. Coupled with The Private Bank’s tried-and-tested “Integrated Team Model,” which provides clients direct access to a suite of specialists and experts, entrepreneurs can then focus on growing their businesses and taking it to the next level.

Looking ahead, it is critical for entrepreneurs to work with the right banking partner that can help bolster their wealth aspirations amid ongoing market uncertainties.

Whether you’re a successful entrepreneur or just starting out, The Private Bank is fully equipped to help you through different stages of growth, to achieve even greater success. J.P. Morgan Private Bank has been a trusted partner to entrepreneurs in Asia and beyond and is well positioned to navigate the entrepreneurial journey ahead.



Establishing Philanthropic Purpose

Giving back to the community has become a priority for many entrepreneurs and family businesses in Asia Pacific. Even in their investing activities, they are not only thinking for profit, but also for purpose.

To this end, a rising number of family businesses in the region are keen to set up philanthropic foundations to support causes that are meaningful to them. Others are also eager to help startups, not just in terms of funding, but also providing advice and mentorship to these budding enterprises.

“In the U.S., we already see so much being done by entrepreneurs to give back, and we are seeing greater interest and activity in the region, especially in places like Singapore and Hong Kong. We have witnessed wealthy families and successful entrepreneurs finding new avenues to pass on their wealth meaningfully and thoughtfully—with impact,” says Karen Tan, Head of Wealth Advisory for Singapore and Southeast Asia at J.P. Morgan Private Bank.

To help them in this growing space, The Philanthropy Centre at J.P. Morgan tailors its advisory service for clients at different stages of their donor journeys. When working with first-time philanthropists, the team focuses on helping them identify and articulate their passions, with the aim of understanding their primary giving interests and the social issues closest to their hearts.

Sometimes it involves building on a framework passed on to them by their predecessors, and coming up with a refined plan with specific and measurable goals that address issues they are most passionate about. In addition to mapping out their philanthropic journey, the team at J.P. Morgan Private Bank has the capability to advise which vehicles could be adopted to effectively achieve specific charitable goals, as well as provide the access to collaborate across the private and public sector—to collectively move the dial.

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After nearly three years of pandemic-fueled anxiety, there has been no let-up in the challenges weighing on wealthy investors in Asia and the rest of the world. Faced with persistently high inflation, rising interest rates and ongoing geopolitical tensions, high net worth (HNW) and ultra-high net worth (UHNW) individuals and families are seeking guidance to grow and preserve their wealth during this volatile period.

“The pandemic has prompted our clients to think more about intergenerational wealth succession. And the changing geopolitical dynamics have further reinforced this need for them to protect and preserve their wealth,” says Bryce Wan, Market Head of North Asia, HSBC Global Private Banking.

With a long history of success in Asia, HSBC Global Private Banking (GPB) is leveraging its comprehensive wealth and banking expertise, international network and digital capabilities to help clients in the region realize their wealth ambitions. In Asia, HSBC GPB has regularly demonstrated its award-winning capabilities in alternatives, credit advisory, wealth planning and philanthropy.

Building Resilience into Portfolios

Against a backdrop of uncertainty, HNW clients are keen to build more resilience into their investments as a buffer against volatility. To this end, HSBC GPB is advising them to rebalance their portfolios towards fixed income, while still taking on some “recession-resilient” risk on the equity side, particularly in the U.S. and Asia.

“On a risk-adjusted basis, fixed income underperformed equities last year, and rates are peaking, so that is a favorable investment environment for bonds, especially mid-duration and quality names,” says Sami Abouzahr, Head of Investments and Wealth Solutions, Hong Kong, HSBC Global Private Banking and Wealth.

He also advises investors to further diversify their portfolios through alternative assets, and to look beyond the immediate to capture opportunities in longer-term structural trends such as green transformation, energy security and smart mobility, among others.

Preserving wealth is just as important as growing wealth. HSBC GPB is also well positioned to support clients in their legacy and succession planning efforts through its market-leading trustee business, protecting and preserving their wealth across generations and geographies. Established in 1946, HSBC Trustee offers clients global coverage with trust companies in Hong Kong, Singapore, Delaware, New York in the U.S. and Jersey in the Channel Islands.

Diversification Remains Critical

Diversification continues to be a key strategy to mitigate risk, and HSBC GPB can optimally help investors diversify their portfolios across assets and geographies. To do so, the bank provides its clients access to global wealth hubs and solutions across four regions—the Americas, Europe, the Middle East and Asia Pacific—through 11 booking centers. Meanwhile, HSBC GPB has over 650 experts worldwide connecting its clients to international opportunities.

HSBC GPB also boasts a successful track record in the alternative investment space, and is able to help investors seek out assets, such as private equity or hedge funds, to potentially reduce the overall risk of their portfolios, as well as uncover uncorrelated opportunities.

“Private individuals have been on a journey to institutionalize how they invest—moving away from short-term trades to long-term investments and structured portfolios. And increasing their exposure to alternatives has been a part of that journey,” says Abouzahr.

“We have been managing alternative investments for 25 years, so we are very familiar with the space. We have the expertise, the connections and the knowledge to help our clients build different kinds of alternatives and integrate them into their portfolios.”

Digital Leadership

To cater to the next generation’s digital needs and enhance client experience, HSBC GPB has been heavily investing in its digital capabilities.

Indeed, HSBC GPB has invested over US$200 million over a four-year period to build and innovate its core banking and digital platforms. This commitment to digitalization has led to greater convenience and better user experience for clients, including a strong uptake of HSBC GPB’s online trading capabilities, with over 35% of execution-only trades in Asia being completed online.

“We are using digital solutions to simplify and enhance everything to do with clients, from trading to accessing market insights or viewing their portfolios. Our recently launched HSBC Prism Advisory in Asia, a portfolio-based advisory and investment service for GPB and eligible retail wealth clients is a great example of how we are combining expert advice with digital capabilities and institutional-grade risk analytics,” says Abouzahr.

“They can also engage with their relationship managers and investment counselors through instant chat on WhatsApp or WeChat in a secure manner via our client messaging platform, HSBC GPB Chat.”

Solutions Spanning the Wealth Journey

As the wealth of Asia’s HNW and UHNW families are largely derived from successful enterprises, their wealth needs tend to span both personal and business, and are likely to evolve over time. HSBC’s “universal banking model” allows the private bank to bring the capabilities of the entire group—from retail and commercial banking to asset management and philanthropy—to meet the diverse needs of their clients over their entire wealth journey.

Collectively, HSBC GPB’s market-leading capabilities and global network enable it to provide clients in Asia with a “one-stop” solution that caters to their complex and changing needs under one trusted brand.

“We are able to take care of our clients through the wealth lifecycle, from the moment they start to build their wealth to the time they decide to pass on their wealth to the next generation, or give back to society,” says Wan.

He adds: “HSBC GPB is in a unique position to provide a full service to our clients, offering a global presence with local expertise, while staying at the forefront in terms of digital and products. This is critical for HNW and UHNW individuals and families in Asia as they look to grow and preserve their wealth in an increasingly complex environment.”

Southeast Asia (SEA) plays a pivotal role in the world’s net zero transition. Southeast Asia is rich in natural resources and at the heart of many supply routes across the globe. The region holds some of the most valuable natural biodiversity in rainforests, mangroves, and peatlands.

However, Southeast Asia is also extremely vulnerable to global warming. Asia has 99 of the 100 most environmentally at-risk cities and crop yields could fall as much as 22% by 2050.

The good news is that many Southeast Asian governments have pledged ambitious carbon neutrality plans backed by massive stimulus to push for green and sustainable industries. And for good reason as the stakes are high.

As part of wider response measures, Southeast Asia’s governments are pledging investment in green technology. These commitments not only seek to address the immediate climate issues but have the potential to create more than US$1 trillion in annual economic opportunities by 2030, according to Bain.

For investors, this is a nascent opportunity as an emerging thematic trend. But knowing where governments and industry will focus efforts could build resilience into your portfolio to grow in tandem with the markets.

Here are themes and market developments to look out for.

#1: Building sustainable smart cities:
Southeast Asia is expecting a population surge of 90 million in the next decade, which will put more stress on existing infrastructure. Cities are a key contributor to climate change, responsible for 75% of carbon emissions, with transport and buildings being the largest emitters. Smart building solutions can unlock cost savings by adopting efficient energy usage.

However, to solve climate change, the future of transport has to be electric, which is insignificant at under 1% of market penetration globally. Indonesia has an ambitious target of producing 20% of electric vehicles of their total production in the next five years.

Globally, electric vehicles are expected to grow by 36% annually, reaching 245 million vehicles in 2030—more than 30 times above today’s level. Southeast Asia, coming from a low base, is expected to see bigger exponential expansion. In the region, electric two and three-wheelers will represent the lion’s share of the total electric vehicle fleet, as this category is most suited to rapid transition to electric drive.

With such goals, there will be immense improvement s in electric vehicle infrastructure. For example, Singapore is aiming to deploy 60,000 charging points and require all newly-registered cars to be cleaner-energy models by 2030 and phase out internal combustion engines by 2040.

#2: Transitioning to greener energy:
In the region, resource extraction and energy generation are still very much coal-reliant and inefficient, and must be decarbonised in a sustainable manner. ASEAN has set a target of 23% share of renewable energy in primary energy supply by 2025.

It is not realistic to suddenly replace fossil fuels with renewables. However, the transition to natural gas is one low-hanging fruit. The advancement of green hydrogen technology can possibly be a solution, but solar and wind has the potential to grow significantly due to substantial land mass in the region.

In Singapore, the government has commit ted to quadruple solar energy deployment by 2025, including covering the rooftops of public housing blocks with solar panels. In another decade, the ambition is to deploy five times that of today, with at least a two gigawatt-peak, capable of powering over 350,000 households a year.

Singapore can also play a crucial role as a clean tech hub as a test bed of commercialisation for new green technologies—such as green hydrogen and battery storage capabilities—and scale these solutions in other markets.

#3: Securing sustainable food chains:
Agricultural practices are subsistence and inefficient in many parts of the region, however, employing technology and localising production are key to feeding a growing and large urban population in a sustainable manner.

Singapore, as a small city with limited land for traditional agriculture, wants to increase its local food production through vertical farms and sustainable aquaculture that can increase yield.

Also, take for instance the upside in development of alternative plant-based protein, which is estimated to generate US$14 billion by 2025, globally. Singapore can be the launchpad for alternative plant-protein research such as cell-cultured protein, and the development of a plant-protein production hub for the region.

Indeed, sustainable agriculture and food technology can be scaled across SEA improving yield, production and security significantly.

#4: Reconfiguring to more efficient supply chains:
SEA’s manufacturing hub can become a viable alternative to China—and supply chains can be reconfigured sustainability. As supply chains shift to this region, more robotics and automation will be employed to improve productivity and energy efficiency.

Furthermore, the implementation of the Regional Comprehensive Economic Partnerships (RCEP), will allow a standardisation of cross-border regulations, which will promote trade efficiencies, streamline logistics and eventually reduce carbon emissions.

Capturing Southeast Asia’s Green Transition

Southeast Asia’s green transition should not be ignored by investors.

The investment case for Southeast Asia’s green opportunities will evolve from a small set of pure play renewable and clean tech companies to a broader set of opportunities across the whole economy. All companies across all sectors will be affected by climate change and are pressured by their shareholders to become net zero and have an action plan in place.

There is growing evidence that investors in the region have recognised the importance of the net zero transition. In Indonesia, Southeast Asia’s largest economy, there is growing demand for ESG solutions from investors, including high net worth and ultra-high net worth (UHNW) individuals and families.

Like their peers in other parts of Asia, Indonesia’s wealthiest are allocating a greater portion of their portfolios to ESG products. This is expected to gain pace as wealth continues to accumulate in the country. According to Statista, the number of UHNW individuals residing in Indonesia is forecasted to increase to over 1,100 in 2025, from 630 in 2020. Meanwhile, HSBC research shows that it is projected that Indonesia’s aggregated financial wealth is expected to grow by over 120% from 2022 to 2030.

The trend will also be fueled by Indonesia’s sustainable transformation. A study by PwC found that ESG is a top business priority for Indonesia, with the government introducing regulatory changes to strengthen the sustainable investment landscape.

On this front, HSBC helps its UHNW clients in Southeast Asia build more resilient portfolios by delivering a range of ESG investment solutions; encompassing a biodiversity thematic discretionary mandate, sustainable core multi-asset solutions and private equity impact funds.

There is a need for investors to be aware of these trends and avoid companies that fail to adapt to these changes. At the same time, investors can gain exposure to Southeast Asia’s green opportunities either through global companies—with strong ESG scores that are adapting to these trends, or pure-play companies that are pushing the boundaries of green innovation.

As Southeast Asia’s transition into a green economy gains traction, knowing what lies ahead will position your portfolio to capture a golden value creation opportunity.

About James Cheo
Mr. Cheo is a member of the Global Investment Committee for Private Banking and Wealth Management and also a member of the Regional Investment Committee in Asia. In his role, he spearheads the development of investment strategies across all asset classes for global private banking and wealth management clients in Southeast Asia. With his knowledge and wealth of experience, his investment views are frequently sought after, with appearances on notable financial media including BBC, Bloomberg, CNBC, and Channel News Asia.