After a year framed by local unrest and a US-China trade war, investors in Hong Kong’s financial markets are more sanguine entering this year.
The territory’s Hang Seng Index last month rallied 7.1 percent, among the world’s top major benchmarks.
Elevated local borrowing costs have put the Hong Kong dollar on pace for its best month since 2003, even as some analysts doubt that the strength will stick.
Worries are still hanging over the territory after its economy plunged into recession and as protests continue following landslide victories for pro-democracy candidates in November.
However, for Hong Kong markets, helping sentiment last month was an initial trade agreement between Washington and Beijing that helped power a return to risk assets globally and sent the S&P 500 to new all-time highs in the US.
The Hang Seng yesterday lost 0.46 percent, or 129.64 points, to end the session at 28,189.75, with volume that was 21 percent less than the 30-day average. The index rose 2,344 points, or 9 percent, for the whole of last year.
“It has been a worse-than-expected year for Hong Kong’s financial markets due to the political events,” Springwaters Financial Group Co (泓瑞源金融證券) Hong Kong-based strategist Sam Chi Yung (岑智勇) said. “Since the city’s tension has eased recently and more trade deals are expected to be signed next year, the market is set for a good start in 2020.”
Sam is expecting a “good rebound” for the Hang Seng in the first half.
Despite last month’s rally, the Hong Kong benchmark last year trailed most major stock indices worldwide.
After the Hang Seng’s strong start last year, occurring as mainland equities surged, markets were hit by inflamed trade tensions, an extended drop in the yuan and worsening economic data in China.
Chinese firms account for more than half the market value of Hang Seng components.
While there was anticipation that the year-end rally for equities can persist, some market watchers believe the Hong Kong dollar’s 0.5 percent gain for last month will prove short-lived.
“The Hong Kong dollar should weaken past the year-end, as local interest rates should soften,” Bloomberg Intelligence Asia foreign exchange and rates strategist Stephen Chiu (趙志軒) said.
“A more sustained retreat in Hong Kong rates and the city’s currency could come after” the Lunar New Year holiday late this month, when there is typically a seasonal increase for cash, he added.
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
RSS