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Thursday, April 7, 2016, 19:07

Finance: HK cedes 3rd spot to Singapore

By Oswald Chan

Finance: HK cedes 3rd spot to Singapore
This picture taken on April 16, 2015 shows the Hong Kong SAR regional flag (center right ) fluttering next to the Chinese national flag (center left ) outside the stock exchange building in Hong Kong. ( AFP PHOTO / Philippe Lopez)

HONG KONG - Singapore overtook Hong Kong to take the third spot among global financial centers as London and New York retained their first and second positions, according to the latest index from the London-based British commercial think-tank Z/Yen Group.

The Global Financial Centers Index, first published in 2007, is released twice a year and ranks the competitiveness of these centers. The ranking is based on a study of instrumental factors and an online questionnaire with over 100 indices, with responses from institutions such as the World Bank, the Organization for Economic Cooperation and Development, and the Economic Intelligence Unit.

The company actively researched 102 financial centers in the survey and 86 of them were ranked in the latest report, the 19th Global Financial Centers Index.

Singapore beat Hong Kong by two points to take the third spot among global financial centers, with 755 points on a scale of 1,000. Tokyo rounded out the top five after Hong Kong at fourth.

Ranked sixth through 10th were Zurich, Washington DC, San Francisco, Boston and Toronto, in that order. The Chinese mainland city of Qingdao figured on the list for the first time, coming in at No 79.

In terms of instrumental factors, the ranking is based on five broad spheres of competitiveness — business environment, financial sector development, infrastructure, human capital, and reputational and general factors.

"The top financial centers of the world are all well developed, sophisticated and cosmopolitan cities in their own right. Successful people are attracted to successful cities and it is perhaps no surprise that these centers are ranked so high by financial services professionals,” the press release for the index said.

Reacting to the news, Terence Chong Tai-leung, executive director at Chinese University of Hong Kong’s Institute of Global Economics and Finance, said: “Fewer overseas enterprises seeking a listing on the Hong Kong bourse and the less-developed local bond market explain the weaknesses of the city’s financial infrastructure.”

"Hong Kong’s niches in (a simple, low) tax regime, financial freedom and human resources are on an equal footing with Singapore,” Leung reiterated. “Even though Hong Kong’s ranking is lower than Singapore, the city’s position as a global financial center will not be threatened by Singapore because the Singaporean economy is volatile.”

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