During the past two years, professionals in the asset management industry have seen very encouraging rates of growth and these have led to a general mood of optimism about prospects for the investment market in 2005.
"The business environment is very positive," confirms KK Cheung, regional business development director for Investec Hong Kong. "More financial products will be launched next year and they are sure to be popular among our clients who are familiar with what investment is all about."
In Mr Cheung's view, key players in the industry will adopt a more diversified approach to investment and a broader range of options will be on offer. "Investments in stocks and debt instruments will be split about 60/40," he predicts. "We would advise investors to buy corporate debt rather than government debt because comparatively low interest rates make the latter less attractive. Investors want to maximise their financial security so the bigger the return, the more popular the products." While American share values are still high, Mr Cheung believes that more investors may opt for European and Asian stocks which are forecast to advance significantly in 2005.
Investec Hong Kong's business focus will remain on developing partnerships with banking institutions. "Customers tend to keep their wealth with major banks in Hong Kong and most of them have not yet considered all the investment options," Mr Cheung says. "The money is there and banks are therefore ideal places for selling financial services and investment products."
He also forecasts that, as the industry grows, the supply of talent will not meet demand. In these circumstances, a relatively simple corporate structure will remain a key advantage, allowing staff to gain greater overall experience. "The demand for new recruits is high and the battle for talent is fierce," he says. Nevertheless, Mr Cheung estimates there will be an increase of at least 20 per cent in the overall workforce in the banking and finance industry in the coming years. "We believe that banks have the greatest potential and will grow even bigger and even more aggressive in their recruitment needs," he says.