Asia’s Savings Shift Fuels ‘Asia Buys Asia’ Investment Boom, HSBC Report Says
Asia is shifting trillions from traditional savings into local investments, building financial resilience across the region, according to a new HSBC report. India and China are spearheading this transformation under what the bank calls the ‘Asia buys Asia’ trend.
The report, released on Thursday, said the macro environment for Asian equities is undergoing a major shift. A weaker US dollar, coupled with debates in Washington over the cost of maintaining the greenback as the world’s reserve currency, is prompting Asia to reduce reliance on foreign capital.
“In such an environment, financial resilience is important — build financial systems that are more ‘local’ and less dependent on the buck,” the report noted.
‘Asia Buys Asia’ – A Mega Trend Since 2012
HSBC has tracked the ‘Asia buys Asia’ movement since 2012. The trend reflects local savings being redirected into regional investments instead of gold, jewellery, or foreign markets.
- Assets under management (AUM) in Asia hit $22 lakh crore at the end of 2024, more than triple the 2012 level.
- This growth represents an 11% compound annual growth rate (CAGR) over 12 years.
- AUM as a share of regional GDP surged to 76% in 2024, up from 44% in 2012.
The report highlights that collective investments such as mutual funds have outpaced pensions and insurance products, though pension schemes have started catching up in recent years.
India and China Lead the Shift
India and China have emerged as the fastest-growing markets in this investment transformation.
- In India, tax benefits for Systematic Investment Plans (SIPs) have played a pivotal role in encouraging households to shift savings into mutual funds.
- In Singapore, the Monetary Authority of Singapore (MAS) is driving growth by supporting asset managers who invest in small and mid-cap companies.
The report suggests that local regulatory frameworks that encourage investor participation are critical to sustaining this momentum.
Implications for Financial Institutions
HSBC believes the trend spells opportunity for banks, insurers, asset managers, exchanges, and brokers.
- Banks can help rural households in markets such as India, Indonesia, and the Philippines move away from traditional assets like gold and jewellery into financial products.
- Asset managers can innovate tailor-made savings and pension schemes.
- Exchanges and brokers stand to gain from increased liquidity in local equity markets.
“We think ‘Asia buys Asia’ is good news for the region’s financial ecosystem,” HSBC said, pointing to rising participation rates and stronger local capital markets.
Why It Matters
The rise of localised investment ecosystems could make Asia less vulnerable to external shocks, reduce dependency on the US dollar, and strengthen domestic financial resilience. With India and China at the forefront, the shift could redefine how Asia funds its growth over the next decade.