Hong Kong’s Hang Seng Index dips below 18,000. Interest-rate rises threaten the property market. The city loses a number-three financial hub ranking to Singapore (as its share of Asian IPOs slumps to 7%). Consumers flock to outlets selling cheap lunch boxes. And the Financial Secretary expects the city to end the year in recession.
In the past, cool heads would be buying stocks now on the assumption that everything would be back to booming business as usual in a couple of years. But that was when China’s growth potential looked boundless. CSIS on the big financial picture…
One asset class after another has become unsafe for investment, starting with peer-to-peer lending networks in 2018 and continuing with corporate bonds, local state-owned companies, trust companies, smaller commercial banks, and property developers.
Andy Xie in the SCMP on the end of China’s property bubble…
With about 7 billion square metres in residential property under construction and unsold, if every marriage leads to a property purchase and the number of marriages doesn’t fall further, it would still take about 10 years to digest the inventory. Given that both assumptions are wildly optimistic, and that land banks, meanwhile, will only add to the inventory, it will be a long slog before the market returns to stability.
With Mainland ‘integration’ a political imperative, there’s no chance of Hong Kong carving out a new role of its own.
Title of Paul Chan’s next Budget speech: ‘Seizing Limpest-Ever Bounce-Back Opportunities’.
We have NatSec-driven emigration. We have Covid restrictions-driven emigration. Now add plain economy-driven flight.
Just in: Chief Executive John Lee calls on ‘patriotic’ journalists to tell more good Hong Kong stories.
Also just in: a clip of CX’s fleet these days.