Hong Kong has a more vibrant capital market ― its stock exchange market capitalisation this month was more than seven times larger than Singapore’s at HK$367.7 billion (US$47 billion), compared to S$9 billion (US$6.4 billion) ― with more Chinese companies choosing to raise funds there. It is also where wealthy mainlanders stash funds.

More than 420 hedge funds are based in Hong Kong, and these funds manage assets worth almost US$91 billion, more than is managed in Singapore, Japan and Australia combined, according to a Financial Times report this month.

About 650,000 foreign residents, including domestic helpers, live in Hong Kong, out of a total population of more than 7 million. Singapore has a population of 5.7 million, of whom almost 1.7 million are foreigners. About 400,000 are foreigners on employment passes that mean they earn at least S$2,400 or S$3,900 a month.

While there have been no signs of an exodus from Hong Kong, bankers and business professionals in Singapore say there have been inquiries from wealthy investors seeking to move more money there and firms mulling over an expansion or relocation of their operations.

One senior banker said banks had been allocating staff to receive any funds flowing out of Hong Kong and into the city state, but they were not expecting businesses to abandon Hong Kong just yet.

The banker, who did not want to be named as he was not authorised to speak on behalf of his organisation, said businesses would be mindful that moves to or talk of relocating could be perceived by Beijing as the brand being “unsupportive” of its policies on Hong Kong.

TMF Group, a professional services firm that provides accounting, tax and human resources support to businesses, said it had received inquiries from companies exploring the possibility of leaving Hong Kong for Singapore. But many of the inquiries “have not translated into action”, said Paolo Tavolato, its head of Asia-Pacific.

“Almost no firm with a head office or regional head office in Hong Kong has chosen to relocate it.”

Over at real estate consultancy Knight Frank, head of capital markets Ian Loh said that since January he had got roughly 30 per cent more inquiries from investors based in Hong Kong.

He has had more clients, ranging from family offices to investment funds, asking about buying strata offices, shophouses and buildings in Singapore, but while some deals have concluded and the investors have moved some business operations to Singapore, Loh said most investors were still in the early stages of exploring their options and were not ready to make decisions yet.

Business consultancy firm Vistra said it had seen “a strong pickup” of new business enquiries from Hong Kong-based companies in the last month, especially from fund management companies.

“The intention is to expand their operations in Singapore to complement their Hong Kong operations,” said Otto Von Domingo, head of commercial Southeast Asia at Vistra Singapore.

Tavolato said his conclusion was that Hong Kong’s strength as a financial and business capital remained, it was “stronger than many give it credit for”, and it had an “incumbent’s advantage” of firms being reluctant to move head offices.

Fatas, the economics professor at INSEAD, said Hong Kong’s proximity to mainland China was a winning factor, echoing a point made by Hong Kong business leaders, who said the city was the gateway to the mainland for both foreign and local firms.