Emigration to UK from Hong Kong could cause capital outflow of $36 billion: BofA
HONG KONG – A news report published by the Bank of America (BofA) said that Hong Kong residents who are shifting to Britain are likely to trigger capital outflows of HK$280 billion ($36 billion) this year.
When China imposed the national security legislation in the city last June, Britain offered refuge to almost 3 million Hong Kong residents who are eligible for British National Overseas (BNO) passport from January 31.
They will be allowed to stay in Britain for five years at which point they can apply for settlement if all the norms are met and ultimately citizenship.
As per the British Home Office study published in 2020, as many as 153,300 people could arrive in the country from Hong Kong this year.
As per the estimates of BofA, if a person leaving Hong Kong sells the apartment for HK$7.53 million ($971,224.41) – the average price in Kowloon district of the financial hub– and withdraw pension savings, then the capital outflow is likely to reach HK$280.2 billion.
The British Home Office study estimated that emigration could reach as high as 321,600 residents in five years beginning from January last year.
It also said the number of emigrants is slated to dip over the next four years. Thus the BofA prediction that the impact on the Hong Kong dollar from the people leaving the city would be reduced.
BofA said over five years, the capital outflow from the global financial hub could touch HK$588 billion ($75.8 billion).
“Capital outflows tied to emigration could help push USDHKD away from 7.75, the bottom end of the band,” BofA strategist Chun Him Cheung said in the research note.