Pegasus Fund Managers Ltd, one of Hong Kong’s leading fund management
and professional financial advisory firms, is confident about the
economy and markets of the Chinese mainland and Hong Kong this year as
it eyes opportunities from the Guangdong-Hong Kong-Macao Greater Bay
“Economic growth in both China and the US is still quite
strong, there is no concern of recession this year, and I believe the
two countries will eventually reach an agreement on the trade dispute,”
Pegasus Managing Director Paul Pong Po-lam, who is also chairman and
founder of the Institute of Financial Technologists of Asia, told China
Daily during an interview.
Pong founded Pegasus in 1990. Having weathered numerous global financial crises, Pegasus has accumulated vast market experience and established a market-leading position over the past three decades.
egasus manages funds and provides management services for Mandatory
Provident Fund (MPF) accounts — those tied to Hong Kong’s mandatory
pension fund. Pegasus’ total MPF assets under management (AUM) stand at
HK$2.2 billion (US$280.27 million).
Positive economic outlook
am quite positive for this year, the A-share market (Shanghai Composite
Index) could go up to 4,500. The reason is that fundamentally, the
central government is doing a very good job, they are stimulating the
economy, and they are doing it better than they did in 2008,” during the
global financial crisis, Pong said.
He said that last year,
market sentiment was dampened by uncertainties about the global economy
and the Sino-US trade dispute. The SSE Composite Index declined 24
percent in 2018, but Pong said he believes the situation has turned
around and that overall sentiment has turned from negative to positive.
Sino-US trade dispute may eventually reach an agreement, and the
biggest uncertainty for the investment community has been partially
lifted, which is why the market has shown a significant rebound since
the beginning of this year.
In addition, interest rates in the US
are likely to stay put at the beginning of this year. The market
expected that interest rates will continue to rise, but the US Federal
Reserve has indicated that no more hikes will be coming this year, which
is more good news for the stock market.
Pong said he believes the Hang Seng Index will surpass 30,000 points this year.
he warned that all these forecasts are based on the assumption that
China and the US can reach an agreement and settle their disputes. If
the negotiations were to fall apart, the Hang Seng Index may drop to
23,000, Pong said.
Despite all the uncertainty externally, Pong is
very confident about the Chinese economy this year. The tax reduction
introduced by the central government at the beginning of this year is
benefiting ordinary people and companies, and domestic consumption is
still quite strong, he said.
Pong said that most Chinese investors
are being too conservative — they are holding too much cash or bonds
while they should be buying stocks of good companies.
valuation of the Chinese A-share market is still very low. If the trade
dispute can be settled in the coming months, export related industries
will outperform,” he said. He added that cyclical stocks, like shipping
firms, commodities and energy, will also start to do well.
Consumption-related stocks, like diary company Vitasoy and hotpot restaurant chain Haidilao, will also be good choices, he said.
said he likes new-economy stocks. The share prices of new-economy
stocks like Xiaomi have dropped a lot, but the leading Chinese tech firm
is starting to make a lot of money this year, and if one of its joint
ventures is granted a virtual banking license from the Hong Kong
Monetary Authority, that would be great for Xiaomi’s share price.
Pong is very excited about the opportunities emerging from the Bay Area.
are a lot of great companies in the Bay Area worth investing in; for
example, the property companies, as well as Hong Kong-listed insurance
companies and banks. If they can extend their services there, they would
benefit greatly from the development of the Bay Area,” he said.
only question left to be answered is when free flow of capital in the
region will happen. “If we open up the Bay Area, Pegasus’s AUM could
grow 10 times from now, from HK$2 billion to HK$20 billion,” Pong said.
Financial planning service
addition to fund management assistance, Pegasus had been providing
high-net-worth clients with asset management services and helped its
clients to plan their finances based on their different stages of life
In the future, financial planning will be a key to
Pegasus’s business, said Pong, explaining that in the past, people
didn’t have many financial-planning choices in Hong Kong.
products are so simple and the property investment has been so
successful, a lot of people have already made a fortune from investing
in properties. They do not need financial planning. If you have money,
you buy property,” he said.
But nowadays in Hong Kong, with the
aging problem and the special taxes imposed by the Hong Kong government
to prevent people from speculating in the housing market, financial
planning has become increasingly important.
administrative region’s government has also introduced more investment
products like the iBond and silver bond, as well as medical insurance,
providing more and more choices for people to consider and to help them
plan for their future, Pong said.
“In the future, when the total
amount of the MPF gets bigger, I believe that the government may relax
the rules and allows MPF to invest in property market, particularly for
the young people,” he said.
Pong suggests that the MPF should be
allowed to allocate a certain portion of the capital to invest in the
Lantau Tomorrow Vision project and the construction of Hong Kong
International Airport’s third runway. Not only will Hong Kong people
enjoy the fiscal returns from these mega projects, they also will be
able to participate in them and thus share the pride of ownership, he
Perseverance brings success to the investment expert
Pong Po-lam said he was very lucky he got sent to St Paul’s
Co-Educational College as a child, even though it was a two-hour trip
there and back.
Pegasus Fund Managers Ltd’s founder and managing
director, who grew up in the Sha Tin district of Hong Kong, said it is a
great school in the city.
“The journey did make me stronger as I
had to walk very fast or even run… During those six or seven years, I
wasn’t late for school even once,” he recalled.
Pong later went
to the Chinese University of Hong Kong to study electronic engineering.
After he graduated, he joined Jardine Matheson as executive trainee. It
was not easy to get into that company at that time because Jardine
Matheson was the biggest company in Hong Kong, according to Pong.
I worked at Jardine Industrial Limited as product manager. At my
position, I saw that Jardine sold their products to all Hong Kong
manufacturers, and my job enabled me to know all kinds of
manufacturers,” he said.
That was in 1981. Pong said many of the
manufacturers had yet to relocate their factories to the Chinese
mainland, but most of them had started to move north.
The turning point
1985, Pong became very interested in investing as he found it more fun
and challenging, and at that time, not many people know what fund
In 1986, he joined a British fund management
company. It was not easy to get in, and he had to put in double the
effort once there.
“At that time, we got all of the money from
overseas to invest into Asia, so they didn’t need Chinese-speaking
managers,” Pong said. “Many of my colleagues were sons or daughters of
super wealthy families, as their family want them to learn how to manage
fund so later they can go back to their family to manage their family
Pong said that most of his colleagues had graduated from
Cambridge, Harvard or Columbia universities. He was one of the few from a
All his hard work paid off, Pong founded
Pegasus in 1990, and now he is an investment expert with more than 30
years in the fund managing industry.
For young people in Hong Kong
who want to get into the financial industry, Pong’s suggestion is that
if you have the resources, you should invest in yourself first and try
to get certification as a chartered financial analyst, certified public
accountant, certified financial technologists or associate financial
technologists as soon as you can.
“Nowadays, getting a law degree is very good if you want to work in the financial industry, as everything is law,” he said.
you have invested in yourself, you can make more money, and after you
have the money, you can start to invest,” Pong said.
“It is not a
bad idea for young people to buy a house. If you have the money, it is
still a good investment. If you don’t have enough money to buy property,
then you can at least invest in property stocks,” he said.
those who want to be a fund manager someday, experience is quite
important, Pong said. First, one has to study hard and learn about this
industry. It also would be very good training if one can invest and try
it with his or her own money, or the family’s money.
“Then you can
analyze the stocks, and analyze your own investment experience. You can
show your record and what you have learned to your potential employer,
to show that you are truly interested in the industry and fully
committed,” Pong said.