Saturday, 04 July 2020
The News and Media Division of The Insight Partners
Wednesday, 03 Jun 2020 03:00 pm

Some global firms consider moving treasury operations out of Hong Kong - sources

Some global companies are considering shifting some of their treasury operations out of Hong Kong as the United States moves to end the city’s privileges, senior bankers said, in the latest blow to the territory’s status as a major financial hub.


U.S. President Donald Trump has begun the process of eliminating special U.S. treatment for Hong Kong to punish Beijing’s decision to impose new national security laws there - which China and Hong Kong say will not hurt rights and freedoms.

Against the backdrop, a handful of global firms are eyeing a move of some of their corporate treasury operations to countries like Singapore, Malaysia, Thailand, and Vietnam, four senior bankers with knowledge of the matter said.

“Companies’ treasury operations follow trade flow and now there are many questions around Hong Kong’s status as a trade hub,” said a Hong Kong-based banker with a leading global trade finance bank.

Trade flows could be hit if the end of Hong Kong’s special relationship with the United States sees the city’s goods subject to the same - higher - rates paid by companies in mainland China, which has been fighting a trade war with the United States. Hong Kong’s zero tariff rates on U.S. imports could also be at risk.

“Some (multinational corporations) are considering shifting a part of their treasury operations (out of Hong Kong) to start with and then gradually scale it up,” the banker said.

A leading U.S. retail chain, which operates hundreds of stores around Asia, is already in early talks with its banks to move some cash management related operations to Singapore from Hong Kong, the banker said.

The bankers, who declined to be named due to the sensitivity of the matter, help companies set up the treasury centres and manage them. They are in talks with the companies about their likely relocation plans but said there was no strict timeline.

If it happens, the development would deal another blow to Hong Kong’s status as a major financial hub, following widespread pro-democracy protests last year.

Already there are signs rich Chinese are seeking to park fewer funds in Hong Kong.

But the Hong Kong Monetary Authority (HKMA), the city’s de-facto central bank, told Reuters via e-mail that interests from corporates in setting up treasury operations in Hong Kong remained strong.

“There is no noticeable sign of fund outflow from either the Hong Kong dollar or banking system,” it said.

Read here

Tags Hong Kong Global financial hub United States Business China Global firms National Security

Neha Pandey

Aware of her elements, Neha writes the best articles across industries including electronics & semiconductors, automotive & transportation and food & beverages. Being from the finance background she has the ability to understand the dynamics of every industry and analyze the news updates to form insightful articles. Neha is an energetic person interested in music, travel, and entertainment. Since past 5 years, she written extensively on sectors like technology, finance and healthcare.

Smarter Decisions with Smart News

Smart Market News is committed to getting its readers the latest updates and insights on industries that help in making “smarter” business decisions. With insights and inputs from corporate decision makers, we bring you the stories of adopting innovative solutions and strategies that have been changing the world. Our editorial insights on products, solutions, companies, and adoption of best practices not only help in understanding the markets better, but also prove to be a complete package for your information needs.

media@smartmarketnews.com | sales@smartmarketnews.com

Contact Us
Subscribe to our newsletter
Get the latest in your inbox weekly Sign up for the fully charged newsletter
Follow Us:
© The News and Media Division of The Insight Partners 2019 | All Rights Reserved | Privacy Policy