High-growth regional centres will spearhead growth in the worldwide financial sector, the latest Global Financial Centres Index (GFCI) finds.
Established centres around the world continue to generate the lion’s share of growth in financial lines, although several regional centres are emerging in developing parts of the world. The GFCI ranks London ahead of New York and Hong Kong, with strong international development found to be a key component of its success. London is now home to the biggest Islamic banking industry outside the Muslim world: a sector that’s grown 50% in two years, and forecast to expand by another third in the next three.
Elsewhere, regional centres in developing areas will see sustained growth. Johannesburg is expected to ride a wave of financial activity in Africa as the continent becomes home to more high-net-worth individuals and private sector activity. Over the next five years, the number of individuals worth more than US$30m in Africa is expected to grow by an average of 6.9% per annum - the fastest rate in the world, according to Wealth-X. International banks are relocating their regional headquarters to South Africa’s largest city to accommodate this growth.
Private sector growth in Asia will lead to a surge in finance activity, most of which will be concentrated in hubs such as Beijing and Hong Kong. The latter is well placed to take advantage of high growth thanks to its established banking system and strong presence in equity markets. It is also the only offshore renminbi trading centre in the world, and an internationalisation of the Chinese currency will boost fortunes in the city state.
Finally, Santiago in Chile recently became the highest-ranked country in Latin America on the WEF financial development table, suggesting a wave of financial activity is likely to be generated in the city. The country’s domestic market has been growing for a long time and financial establishments are now looking to international investors to liquify the market further.
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