KUALA LUMPUR, April 19 — China’s “Belt and Road” infrastructure investment drive will help boost capital markets in the region, including Malaysia, says HSBC Bank Malaysia Bhd.

In a statement today, HSBC said the impact on financing would also be significant as the vast amounts of money needed to meet Asia’s infrastructure needs would inject fresh momentum into the region’s capital markets.

This included Malaysia, which is already seeing more investors from China tapping into its market to capitalise on the country’s position as the gateway to the Asean Economic Community, it added.

The bank said Chinese investment in planned and ongoing “Belt and Road” projects could total 1.5 trillion yuan (RM907 billion) in the coming years, with part of this coming from the US$40 billion (RM156.8 billion) Silk Road Fund and the newly launched US$100 billion Asian Infrastructure Investment Bank (AIIB).

Apart from that, HSBC said related spending on “Belt and Road” projects would help provide the much-needed breadth, depth and liquidity to many of Asia’s smaller markets.

It said a “pull factor” was also at work here, in the form of Asian cash looking for yield and investment options.

“Many of Asia’s economies, including Malaysia, are still growing well above the global average, and the Asean region’s middle class is set to double by 2025.

“And for an ageing population in countries like Malaysia, the stable income provided by bonds can be an attractive investment option as retirement approaches,” it added.

On the currency front, HSBC said the initiative also would help boost the internationalisation of the Chinese currency as more and more of the increased trade that “Belt and Road” facilitates would be settled in renminbi.

“The ‘Belt and Road’ initiative will help make it easier for trucks, ships and trains to transport goods around large parts of the globe.

“But it could well have another valuable impact in oiling the wheels of finance,” it added. — Bernama