Lunar New Year Chinese visitors to Singapore, Hong Kong help revive gold post-Covid

Lunar New Year Chinese visitors to Singapore, Hong Kong help revive gold post-Covid
  • ‘We have seen an increase in visitors … certain Chinese customers, who have not been buying from us for a long time, have resumed’, one trader said
  • Gifts of gold at Lunar New Year are thought to bring luck to both giver and receiver. China is the biggest consumer and producer of the precious metal

 

 

China’s reopening ahead of the Lunar New Year holiday has brought back the lustre of gold in two of Asia’s most important financial hubs – Hong Kong and Singapore.

A steady stream of Chinese visitors since borders reopened on January 8 has stoked up premiums on gold – a mark-up paid to secure speedy deliveries and cover overhead costs – by around 300 per cent to US$3 an ounce from a year ago, dealers say.

Spot gold prices – what the customer on the street actually pays – are hovering around an eight-month peak of US$1,900 an ounce in global markets.

“It’s early days yet, but we have definitely seen an increase in visitors over the past week. Certain Chinese customers, who have not been buying from us for a long time, have resumed,” said Padraig J Seif, Founding Partner of the Hong Kong based-Precious Metals Asia.

Traditionally, gold buying peaks in the run up to Lunar New Year, which this year falls on January 22. Visitors from the mainland like to shop in Hong Kong and Singapore because of the high quality of precious metal products such as jewellery and coins.

“Gold holds a special place for Chinese people, it symbolises wealth and prosperity, making it a popular choice for Lunar New Year gifting,” said Hong Kong-based Chow Tai Fook Jewellery Group in a statement, adding that it had seen an increase in gold purchases recently and was expecting a “surge in demand for bridal jewellery as 2023 is considered to be an auspicious year for couples looking at tying the knot”.

Buying momentum likely to increase

Around 64,000 mainland Chinese visitors have streamed into Hong Kong since borders reopened. That flow is expected to increase as a quota of 50,000 travellers per day across four land border checkpoints will be raised to 65,000 a day for four days from Wednesday.

City authorities have also announced that they would increase the number of daily rail tickets from Wednesday.

The momentum in gold sales is expected to last even after the holiday season because of around two years of pent up demand, as many Chinese people are still reluctant to travel because of Covid-19 but are expected to gradually start taking trips.

The holiday season also arrived earlier this year, as it often falls in February. Beijing’s abrupt U-turn on zero-Covid in late December surprised many people and did not give them enough time to firm up travel plans before Lunar New Year.

Gold has long been considered a way to store and lock in value, and demand for it spiked in Asian markets in the initial months of the pandemic in 2020 because of a climate of uncertainty. But the bullion trade in Asian hubs crashed soon after China imposed travel restrictions.

“Lot of people stopped buying because they were experiencing financial difficulties,” said Seif, whose sales revenue in the first two weeks of January has already surpassed that of the entire month a year ago.

It’s not just retail buyers of jewellery, either – long term investors are also turning back to gold. The US Federal Reserve is expected to this year soften its aggressive rate increases, which could make returns on the precious metal higher than on interest-bearing bonds.

Investors have also gravitated towards the precious metal because of its safe haven appeal due to geopolitical tensions such as the Russia-Ukraine war and the looming prospect of a global recession.

Investment bank Goldman Sachs expects gold to trend even higher than it is now later this year, at around US$1,950 an ounce.

Demand in China, the world’s largest gold consumer and also the biggest producer of the precious metal, is expected to have an important bearing on prices.

Like Hong Kong, Singapore’s gold trade is also benefiting from China scrapping travel restrictions with the city state bracing for overall visitor arrivals to rise to 12-14 million, around double the year before.

“Chinese gold demand is expected to drive the global market this year,” said Spencer Campbell, the Singapore-based director of SE Asia Consulting Pte Ltd.

“With the easing of restrictions in China, retail demand for gold is expected to increase in Singapore and Hong Kong as more people shop for gifts and jewellery to celebrate the Lunar New Year.”

Demand has picked up across Asia since late last year, he added.

Indian consumers – in second place after their Chinese counterparts – bought a record amount of the metal in the fourth quarter of last year.

Some Asian investors have switched to precious metals from cryptocurrencies after one of the largest global exchanges, FTX, went bankrupt in November following a surge in customer withdrawals.

Bitcoin, one of the most actively-traded currencies that soared to an all-time high of US$69,000 in November 2021, is now trading at around US$21,000.

However, one Singapore-based fund manager appeared unimpressed by gold’s charms and said savvy investors can take advantage of cryptocurrency volatility, with traders buying at low prices and selling when they rise.

“Gold may be a safe haven” but there were many other opportunities elsewhere for investors “to profit from price fluctuations”, said Anndy Lian, a partner at the Singapore-based Passion Venture Capital and author of the book NFT: From Zero to Hero.

Bullion dealers have said the increased purchasing of gold following China’s reopening is likely to last until the end of the first quarter. Chinese appetite for gold could well continue at the same brisk pace throughout the year if the economy revives and incomes bounce back, they noted.

 

Source: https://www.scmp.com/week-asia/article/3207411/lunar-new-year-chinese-visitors-singapore-hong-kong-help-revive-gold-post-covid

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Positive Crypto Signs from U.K. and Hong Kong: Who is the New Crypto Hub?

Positive Crypto Signs from U.K. and Hong Kong: Who is the New Crypto Hub?

U.K. has a new pro-crypto PM and a new name for stablecoins

At the point of the news on the vote to recognize Crypto as regulated financial instruments, Bitcoin just spiked to $21,170. This aligns with the new crypto developments in the U.K. market. As part of the Financial Services and Markets Bill, the U.K. House of Commons, the lower house of Parliament, agreed on Tuesday to regulate cryptocurrency assets as financial instruments. The House of Lords, the upper house, will vote on the bill before it becomes law. This occurs as Rishi Sunak, who on Monday was appointed as the nation’s next prime minister, has a history of endorsing cryptocurrencies.

The local cryptocurrency sector, which recently celebrated Rishi Sunak’s election as the nation’s new prime minister, will likely applaud moves to grant legal legitimacy to digital assets. When Sunak served as the Boris Johnson administration’s finance minister, he presented the markets bill, which indirectly led to the stablecoin regulations.

The bill expands upon current stablecoin regulating provisions and uses the term “Digital Settlement Assets” (DSA) in place of “crypto assets,” moving away from the use of the phrase “crypto assets.” Stablecoins with a focus on payments that are cryptocurrencies tethered to the value of other assets like the U.S. dollar or gold were already covered by elements in the draft bill that would have extended existing restrictions to them.

According to Griffith, the financial services and city minister, the crypto provision “clarifies that crypto assets could be brought within the scope of the existing provisions” of the Financial Services and Markets Act 2000 relating to regulated financial activities. The crypto provision depends on the definition of “crypto asset” inserted by a new clause 14. The regulations might control cryptocurrency advertising and ban businesses that aren’t allowed to operate nationwide.

“The Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities,” Griffith said. He added: “The Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities,”

The Crypto and Digital Assets All Party Parliamentary Group (APPG) provides a forum for parliamentarians, regulators and the U.K government to discuss challenges and opportunities relating to the crypto sector. This group, chaired by Scottish National Party member of Parliament (MP) Lisa Cameron, has issued a written statement to the media seeking regulatory clarity and business certainty. “U.K. crypto and digital asset firms desperately need clarity over the U.K.’s approach to crypto policy and for the government to deliver on its vision for the U.K. crypto sector,” Cameron said in the statement.

The legalization of cryptocurrencies and digital assets as financial instruments is still pending. Important requirements that must be met for the Bill include: Before the Bill receives final royal sanction from the next king, King Charles III, the House of Lords will need to accept or change it.

The U.K. government can assure financial stability and strong regulatory standards by recognizing the promise of this technology and regulating it at this time, allowing these new technologies to be employed in the future reliably and safely.

Hong Kong wants to be positioned as crypto hub, while Singapore pivots

A few years back, Hong Kong was on the right track to becoming a crypto hub. Then Hong Kong’s regulator, the Securities Futures Commission (SFC) knocked on doors. Exchanges were questioned about listing tokens that seemed like securities and also issued warnings about high leverages.

Fast forward to 2022, October 31, the Hong Kong government is exploring legalizing retail crypto trades. Financial Secretary Paul Chan announced in a keynote speech at the Hong Kong Fintech Week conference that authorities would begin a consultation process on providing retail investors with “a suitable degree of access” to virtual assets. “We want to make our policy stance clear to the global market, to demonstrate our determination to explore fintech with the global virtual asset community,” he added.

In contrast, Singapore is significantly restricting access to cryptocurrencies for individual investors after last year’s market collapse brought down several digital asset companies with ties to the Southeast Asian country and caused much greater losses throughout the industry. If you remember, many of the huger crypto companies moved from Singapore to Dubai, and now the same thing is happening again. Hong Kong appears to be the next hotspot for digital-asset enterprises, entrepreneurs, and investment.

Even the head of the central bank, Ravi Menon, admitted in a Bloomberg Television interview that some crypto enterprises with a retail concentration would leave the city-state, stating plainly, “We wish them good luck.”

Cryptocurrencies “play a supporting role in the broader digital asset ecosystem, and it would not be feasible to ban them,” the Monetary Authority of Singapore (MAS) stated in a media statement. Singapore’s stand is very firm and has made it clear that they are not banning cryptocurrencies and is working towards reducing risks.

Positive signs

I see all these are positive signs. Singapore is planning ahead. Hong Kong is leaving some room going forward. U.K.’s plan is ambitious. Hong Kong seems like walking on a different path than China which has banned cryptocurrencies completely. People on the ground are now speculating that Hong Kong could be the outflow channel for the Chinese to start trading cryptocurrencies again.

The recognition of cryptocurrencies under proper regulations would go very far. I am optimistic about the outcomes. #anndylian

 

Source: https://www.benzinga.com/22/11/29572049/positive-crypto-signs-from-u-k-and-hong-kong-who-is-the-new-crypto-hub

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Hong Kong Regulator Steps Up Awareness Campaign on NFTs

Hong Kong Regulator Steps Up Awareness Campaign on NFTs

My original comments to the reporter look like this. I have added additional insights.

“The Securities and Futures Commission (SFC) must do this ASAP as I do see numerous NFT projects started in Hong Kong that are wrapping securities and derivatives around NFTs. In fact, I have said numerous times in my public speeches that such an act is not grey, it is totally illegal.

Tencent and Ant Group changed the descriptions of NFTs on their platforms to ‘digital collectibles’ to play down their links to cryptocurrencies last year. The bigger boys did their homework way beforehand to avoid any possible issues with regulators in China and Hong Kong.

I urge SFC to take put a hard stop to all the bad actors who are trying to operate regulated activities in Hong Kong or targeting Hong Kong investors using NFT as a workaround.”

Hong Kong Regulator Steps Up Awareness Campaign on NFTs

The Hong Kong Securities and Futures Commission (SFC) has stepped up its awareness campaign on non-fungible tokens (NFTs), cautioning investors against investing in them if they do not fully understand the risks.

“As with other virtual assets, NFTs are exposed to heightened risks including illiquid secondary markets, volatility, opaque pricing, hacking, and fraud. Investors should be mindful of these risks, and if they cannot fully understand them and bear the potential losses, they should not invest in NFTs,” the SFC stated.

The SFC noted that there are a number of NFTs that represent the digital representation of an underlying asset and in which case, it has little role to play in the trading of those assets.

However, the financial regulator said, there are NFTs that are portrayed as securities and these types must be licensed before it is offered to residents.

Assets that push the boundary between collectibles and financial assets, such as fractionalized or fungible NFTs structured as securities or collective investment schemes (CIS) in NFTs, do fall under the SFC’s mandate.

A CIS is an investment arrangement, to pool money around a certain asset or property. The Hong Kong Securities and Futures Ordinance (SFO) requires CIS to be managed in escrow, and its participants do not have day-to-day control over its management. They however are subject to receive profits, income, or other returns.

The solicitation of Hong Kong residents by companies engaged in these activities requires the issuer to obtain a license from the SFC unless an exemption applies.

SFC has mandated a license from Hong Kong residents who wish to issue fractionalized NFTs or to target local investors or be subject to certain authorization requirements under the SFO.

Anndy Lian, chairman, BigONE exchange, says a few well-known corporations that are based in China changed the descriptions of NFTs on their platforms to ‘digital collectibles’ to play down their links to cryptocurrencies last year.

“They did their homework way beforehand to avoid any possible issues with regulators in China and Hong Kong. I urge SFC to put a hard stop to all the bad actors who are trying to operate regulated activities in Hong Kong or target Hong Kong investors using NFT as a workaround,” Lian says.

Raj Kapoor, chief advisor of crypto advisory firm Acryptoverse says security issues are just a major legal concern when it comes to NFTs and that each different NFT model presents a unique legal issue.

“License uncertainty is another risk while IP ownership many a time is opaque. Copyright Infringement raises concerns as well. Deceptive and unlawful trade practices for misrepresentation of ownership of the work underlying an NFT is also a deep risk factor,” he added.

Money Laundering including self laundering is another as potential criminals purchase an NFT with illicit funds, transact with themselves to create records of sales on the blockchain, then sell to another party using clean funds.

 

Original Source: https://uk.investing.com/news/cryptocurrency-news/hong-kong-regulator-steps-up-awareness-campaign-on-nfts-2665065

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j