Commentary The most important economic question to date is still the old one: whether inflation has peaked or still has some months to go. The U.S. official tone on inflation has always been on the supply side such as the logistic blockage due to Covid-19 lockdowns or the Ukraine-Russian war. The demand side of ridiculous…
Hong Kong’s Bankruptcy Filings Hit New High in April, HKMA Bought Nearly $7.5 Million USD to Defend Currency
Individual bankruptcy filings jumped to nearly 1,000 in April, a new high in Hong Kong since May 2020. At the same time, the Hong Kong dollar suffered the largest sell order, and the Hong Kong Monetary Authority (HKMA) again intervened to buy nearly HK$5.9 billion (about $750 million). Analysts believe that the interest rate spread…
Hong Kong’s Status as an Airport Tanks as Passenger Traffic Drops to 2 Percent of Pre-epidemic Levels
Many countries have eased their travel restrictions now that the global epidemic has slowed down. But this is not the case in Hong Kong under the Chinese Communist Party’s (CCP) zero-COVID policy. A recent report released by Natixis, the French investment bank, said Hong Kong’s strict entry restrictions, continued outflow of residents, and other negative…
Slow Start Continues as Hong Kong IPOs Saw the Lowest Fundraising in 12 Years
Hong Kong’s initial public offering (IPO) market saw the lowest fundraising rate in 12 years, with IPO proceeds in May slumping to less than $140 million, and totaling a record low of $2.21 billion for the first five months of 2022. Amid the market’s grim outlook, the Hong Kong Exchanges and Clearing (HKEX) plans to…
Hong Kong, US to End Mutual Accounting Recognition Agreement, Signaling Further US-China Decoupling
The Hong Kong Institute of Certified Public Accountants (HKICPA) failed to renew an 11-year mutual recognition agreement (MRA) with the U.S. International Qualifications Appraisal Board (IQAB) over failure to waive the requirement for one-year of local experience. Announcement of the MRA non-renewal happened amid deteriorating China-U.S. relations, particularly after the recent U.S.-ASEAN Special Summit. The outcome…
Hong Kong’s GDP Shrinks by 4 Percent in Q1, Full-Year Economic Growth Forecast Halved
Hong Kong’s economy contracted by 4 percent in the first quarter, disrupting the growth trend of the previous four quarters. The Hong Kong government adjusted its full-year economic growth forecast to nearly half of the original forecast. The economic contraction coincided with a sharp rise in the unemployment rate to 5.4 percent, the highest level…
Hong Kong Monetary Authority Steps in to Defend Its Weak Currency Amid Capital Outflow
May 21, 2022
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capital outflowChinaHK BusinessHK Current AffairsHong KongHong Kong Monetary Authoritymonetary policy
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The Hong Kong dollar continues to weaken as the United States starts its interest rate hike cycle. To maintain Hong Kong’s linked exchange rate system, the Hong Kong Monetary Authority (HKMA) made five purchases of HK$17.586 billion ($2.24 billion) in five days. Market participants expect that Hong Kong may have a net outflow of $100…
China Is Weaker in Demand Than Supply
May 19, 2022
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AnalysisBusiness & EconomyBusiness ColumnistsChinachina stagflationemerging marketsFederal ReserveHK BusinessHong KongOpinion
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Commentary None of the latest data released from China were good. Inflation was higher than expected while all other quantity growth rates were lower than expected or declining, arousing the worry of stagflation. Stagflation is by definition a higher price (growth) with a lower quantity (growth), and is highly likely a result of a leftward…
Hong Kong Raises Interest Rate, its USD-Pegged System May Detonate Asset Bubble
The Hong Kong Monetary Authority (HKMA) recently announced an interest rate hike after the region’s foreign exchange reserves hit a two-year low. Stabilization of the HKD exchange rate would eat into many foreign exchange reserves, and create a pressing threat to the assets bubble, experts warned. HKMA’s move comes the day after the Federal Reserve…
Hong Kong’s First Quarter Exchange Funds Lose in Billions, GDP Declines: HKMA
Hong Kong is seeing an omen of economic retreat in the first quarter of this year, with foreign exchange funds at an never-seen loss of $7.2 billion from two years ago, and the GDP devalued by 4 percent. A May 3 advanced estimate released by the Hong Kong government suggested that in the first quarter,…
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