China sees growing roadshow interest

July 18, 2016 | By Liana Cafolla

Hong Kong and Singapore remain favorite roadshow destinations in Asia

While mainland China’s appeal as a roadshow destination is growing, Hong Kong and Singapore retain their positions as firm favorites for roadshows in Asia. That’s according to Lily Xiong, head of corporate access for Asia-Pacific at investment bank Jefferies.

‘Hong Kong is still the top choice for Asia; Singapore is number two,’ says Xiong, who has worked at Jefferies for a year and in the industry in China for more than 12 years.

The whole of Asia has become more attractive to US and European investors in the last two to three years, Xiong continues, as companies from both continents have cast their sights further afield in the search for investors. This year has seen some contraction, however, as many companies have cut their budgets for overseas travel because of the more difficult economic environment.

Even so, global interest in China as a roadshow destination is heating up and the country’s recent slowdown has not dampened investor interest due to the size of the market and the long-term potential.

‘The interest is still very high,’ Xiong says. ‘Mainland China is becoming increasingly attractive because there are more firms based in China that can invest overseas. China still has a lot of money [looking for a home]. There are still lots of opportunities there.’

With the increasing number of millionaires in the country, private wealth management is a particular growth area, she adds.

Top cities for investment roadshows in China are Beijing and Shanghai, but Hong Kong remains the main hub for both Chinese companies and investors. The city has been actively marketing itself for several years as the top destination choice for Chinese firms that want to attract international investment, and leading China funds have based their overseas investment teams in the city.

What makes Hong Kong the top choice for international companies holding a roadshow in Asia? According to Xiong, the city offers a higher number of Asian head offices and a wider variety of company types than Singapore.

Other investment hubs in Asia have also seen more interest from European and US companies. In the last three to four years, large sovereign wealth funds and national security funds have helped Tokyo, Taiwan, Kuala Lumpur and Seoul attract more interest as roadshow destinations. Retirement funds in Malaysia, meanwhile, have seen double-digit increases in size for the last three years, notes Xiong.

Over the same period, more Asia-based companies from these countries have also shown interest in investing overseas. ‘A lot of domestic companies in these countries have been trying to attract a higher proportion of overseas investment,’ Xiong says, citing as an example a Tokyo-based company that has increased its share of overseas investment from about 10 percent to around 30 percent in the past couple of years.