Figures from the Hong Kong Monetary Authority show that earlier large IPO subscriptions increased bank deposits by 6.4% month-on-month at the end of October 2020, including a 9.8% increase in Hong Kong dollar deposits. With the end of these IPO subscription activities, especially the Ant IPO plan was suddenly called off by Beijing, a large number of issuers returned subscription funds, total deposits of banks in November fell 6.8% month-on-month, including Hong Kong dollar deposits plunged 12.6% month-on-month or 1.05 trillion Hong Kong dollars, foreign currency deposits also fell slightly by 0.2%.
It is worth noting that Ant’s public capital raising in Hong Kong was HK$275 billion, while more than one trillion flowed away afterwards.
Excluding the impact of new share subscription activities, total deposits and Hong Kong dollar deposits of banks fell 1.2% and 2.2% respectively in November, mainly due to some large corporate clients repaying loans with deposits.
RMB deposits in Hong Kong rose by 5.6% to RMB718.3 billion at the end of November. Total RMB remittances for cross-border trade settlement amounted to RMB526.3 billion in November, compared to RMB414.2 billion in October.
The HKMA explained that deposit movements are affected by a number of factors, including interest rate movements and the amount of fund-raising activity in the market, and there is no need to focus too much on fluctuations in individual months.
It added that monthly monetary statistics may be subject to fluctuations due to various short-term factors, such as seasonal and public offering-related funding needs, as well as business and investment-related activities, and should therefore be interpreted with caution.
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