Follow Hong Kong Investment Immigration and Hong Kong Economy: The battle for RMB deposits among Hong Kong banks continues to escalate. Following the launch of RMB deposit promotions by over a dozen banks last month, CITIC Bank International, Wing Lung Bank, and Bank of China (Hong Kong) have recently raised their RMB deposit interest rates again. Analysts point out that the banks' proactive stance is primarily to reserve RMB funds for the Shanghai-Hong Kong Stock Connect, as the Hong Kong banking sector remains very optimistic about its launch in the near term.
The three top financial officials of Hong Kong visited Beijing this week to meet with mainland financial regulatory authorities, including the "one bank and three commissions." Hong Kong Financial Secretary John Tsang revealed on the 5th that he had communicated with relevant departments regarding the Shanghai-Hong Kong Stock Connect, receiving positive feedback from all ministries. Hong Kong units are fully prepared and ready to cooperate with the mainland for the launch at any time.
Banks Offer High Interest Rates to Compete for RMB
On the 5th, CITIC Bank (International) raised the interest rate on its 3-month fixed deposit product by another 0.1% while significantly lowering the entry threshold, reducing the required capital for the fixed deposit project from the original 300,000 RMB to 50,000 RMB. This is the second time within a month that CITIC Bank (International) has raised its RMB deposit interest rate. The bank previously announced on the 14th of last month the launch of 1-month and 3-month RMB fixed deposit promotions, with preferential annual interest rates as high as 4.5% and 3.8% respectively, and an entry threshold of only 50,000 RMB.
Wing Lung Bank also raised RMB deposit interest rates for five tenors starting from the 5th, with the 2-month tenor seeing the largest single increase of 0.7%. Meanwhile, Bank of China (Hong Kong) also slightly raised its 3-month preferential interest rate by 0.01% to 3.18% on the 4th.
In fact, starting last month, over a dozen banks including Citibank and Bank of China (Hong Kong) have successively launched RMB fixed deposit promotions, attracting RMB funds through means such as increasing interest rates. Driven by the high-interest deposit solicitation by various banks, the short-to-medium-term RMB fixed deposit interest rates at most banks in Hong Kong have now exceeded 3%.
Analysts point out that the banks' proactive stance is primarily to reserve RMB funds for the Shanghai-Hong Kong Stock Connect, as the Hong Kong banking sector remains very optimistic about its launch in the near term.
Strong Expectations for the Near-Term Launch of Shanghai-Hong Kong Stock Connect
The fact that the Shanghai-Hong Kong Stock Connect was not launched in October as expected by the market has not dampened the expectations of the Hong Kong financial industry. Representatives of Hong Kong investment institutions generally stated at the 8th Annual Conference of the Hong Kong Investment Funds Association recently that they are not worried about the shelving of the Shanghai-Hong Kong Stock Connect and remain optimistic about its launch.
Hong Kong Financial Secretary John Tsang, Secretary for Financial Services and the Treasury K.C. Chan, and Chief Executive of the Hong Kong Monetary Authority Norman Chan visited Beijing this week to meet with their counterparts in central financial ministries, including the "one bank and three commissions," the Ministry of Finance, the Ministry of Commerce, and the Hong Kong and Macao Affairs Office. The industry has high hopes for them to lobby the central government for an early launch of the Shanghai-Hong Kong Stock Connect, and John Tsang revealed to the media on the 5th that "the feedback from all ministries is positive."
The Hong Kong Exchanges and Clearing Limited (HKEX) released its third-quarter earnings report on the 5th, in which it specifically disclosed the preparations for the Shanghai-Hong Kong Stock Connect. HKEX stated that the preparatory work for the Shanghai-Hong Kong Stock Connect program has been largely completed, and in the coming work, HKEX will continue to familiarize participants and investors with the program through various channels. However, as of November 5th, the Hong Kong Exchanges and Clearing Limited has not yet obtained the relevant approvals to launch the Shanghai-Hong Kong Stock Connect, and therefore there is no confirmed date for its implementation.
On Monday, the Hong Kong Monetary Authority also announced that it would launch a "daytime liquidity arrangement" next Monday (the 10th), providing 10 billion RMB in daytime liquidity to authorized institutions participating in Hong Kong's RMB business. The HKMA stated that this move is intended to help banks handle payment arrangements after the future launch of the Shanghai-Hong Kong Stock Connect, allowing banks greater flexibility.
