New York pipped London by just two points in the latest Global Financial Centres Index (GFCI), although both centres fell slightly in the ratings, with Hong Kong now only three points (on a scale of 1,000) behind London.
The rise of Hong Kong stands out as one of the more interesting elements within the twenty-fourth edition of the GFCI (GFCI24). The report provides what it calls “evaluations of future competitiveness and rankings for 100 major financial centres around the world” and is seen as reference for policy and investment decision-makers, according to its creators.
China Development Institute (CDI) in Shenzhen and Z/Yen Partners in London collaborate in producing the GFCI. The GFCI is updated and published every March and September for the industry (with a later media release) and receives considerable attention from the global financial community.
Some 110 financial centres were researched for GFCI 24 of which 100 are now in the main index. The GFCI is compiled using 137 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations, the report stated.
In a further boost for the Far East, which features three out of the top five financial centres (see league table below), Shanghai overtook Tokyo to move into fifth place, gaining 25 points in the ratings. Beijing, Zurich, and Frankfurt also moved into the top ten centres, replacing Toronto, Boston, and San Francisco.
In Western Europe, Zurich, Frankfurt, Amsterdam, Vienna, and Milan moved up the rankings significantly. These centres may be the main beneficiaries of the uncertainty caused by Brexit. Surprisingly, despite some evident success in attracting new business, Dublin, Munich, Hamburg, Copenhagen, and Stockholm fell in the rankings, reflecting respondents’ views of their future prospects for attaining business.
In Asia-Pacific, the leading centres performed well, closing the gap on London and New York at the top of the rankings. There were steady increases for Shanghai, Sydney, Beijing, and Guangzhou and GIFT City (Gujarat) and Hangzhou entered the index for the first time, the report said.
Island centres fell in the index, with the exception of Bermuda, which rose six places. The British Crown dependencies of Jersey, Guernsey, and the Isle of Man all fell significantly in the rankings, with the Isle of Man dropping quite dramatically a full 27 places.
The leading North American centres fell back in the rankings and ratings overall, although Los Angeles and Washington DC gained places.
In Eastern Europe and Central Asia, there were significant gains for Astana, Budapest, St Petersburg, and Tallinn. Astana only officially launched their financial centre in July, and it is unusual for such a new centre to perform so strongly.
In the Middle East and Africa, Dubai, Abu Dhabi, and Doha all rose significantly reversing the trend from GFCI 23. Cape Town is the highest new entrant to the index, ranking 38th in its first entry.
In Latin America and the Caribbean there were mixed results. Bermuda, Sao Paulo, Mexico City, and Rio de Janeiro performed strongly, while other centres fell in the rankings.
The instrumental factors are combined with financial centre assessments provided by respondents to the GFCI online questionnaire (www.globalfinancialcentres.net). GFCI 24 uses 31,326 assessments from 2,453 respondents.