“Rising tensions in Hong Kong, starting with protests last year and the announcement of a national security law last month could potentially cause flows to Singapore if Hong Kong’s status as a financial centre is threatened,” Diksha Gera, a banking analyst at Bloomberg Intelligence, wrote in the report Tuesday.
The increase in foreign-currency deposits may have been caused by factors such as deleveraging of private banking portfolios and fund managers’ positions as risk-averse clients sold financial assets, Gera wrote.
Singapore and Hong Kong have long attracted the wealthy from all over the world to park their assets with banks including UBS Group AG and Credit Suisse Group AG. Since last year, Hong Kong has been hit by waves of protests against the government which have intensified in recent weeks because of the opposition to China’s new laws.
Hong Kong’s local-currency deposits fell by HK$79.2 billion ($10 billion), or 1.1%, to HK$6.9 trillion in April from a year ago, the Hong Kong Monetary Authority said in its monthly report.
