Hong Kong bank deposits expand by US$29 billion in June, biggest jump in over two years as hot money chases JD.com, NetEase mega IPOs
- It is the biggest monthly jump since April 2018, at 1.6 per cent, bringing the total cash held in bank accounts beyond HK$14 trillion at the end of June
- The wave of hot money has repeatedly pushed the Hong Kong dollar exchange rate above its upper limit, forcing the HKMA to intervene 32 times as of Friday
Deposits held in accounts rose by HK$225.84 billion (US$29.14 billion), or 1.6 per cent, to break through the HK$14 trillion mark at the end of June, according to monthly statistics issued by the Hong Kong Monetary Authority (HKMA) on Friday.
It was the biggest monthly increase since April 2018, and followed a 0.3 per cent decrease in May and a 0.8 per cent rise in April.
The surge came as a result of US$14 billion in hot money – short-term investment cash chasing quick returns – that has flooded into the city since April, Eddie Yue Wai-man, chief executive of the de facto central bank, said last week.
The HKMA has not provided any details of the inflow, but brokers believe it comes from investors chasing recent mega IPOs including those of online shopping giant JD.com and internet gaming company NetEase, which raised almost US$7 billion between them.
The leap in bank deposits was only half that recorded in April 2018. On that occasion, the amount surged by 3.2 per cent as a series of massively oversubscribed IPOs came to market. They included Ping An Good Doctor’s US$1.12 billion flotation, which saw its retail portion oversubscribed by about 650 times.
