International hot money into Hong Kong
Subject to the domestic economy to the good data in the third quarter impact of the recent acceleration of overseas hot money into Hong Kong.
Hong Kong experts interviewed said the influx of hot money has pushed up Hong Kong’s stock and property markets and other asset prices, will accelerate the formation rate of the property market bubble, which should maintain adequate vigilance.
As the continued influx of hot money from overseas continue to hit Hong Kong’s linked exchange rate lock to protect the strong-side, leading to Hong Kong Monetary Authority 22, 23 for 6 times intervene in the market, to market injected a total of more than 17.8 billion Hong Kong dollars, bringing in Hong Kong since October market, the HKMA has injected 74.35 billion Hong Kong dollars, more than the peak in May when the full month of 73.78 billion Hong Kong dollars capital injection records which form the Hong Kong Monetary Authority intervention in the market during the year’s biggest one-month effort.
With regard to sources of hot money, the Hong Kong University of Science and Technology economist Francis Lui Ting-ming, said that since last year, mainly quantitative easing monetary policy in Europe and the United States released to the market a lot of funding. A lack of investment due to the prevailing market opportunities, greater investment risks in all aspects, so a lot of money in a dormant state. With market confidence restored, a market capitalization in March this year began active in Europe and the United States pushed up the stock market have also begun to target emerging markets, the recovery momentum in economic activity in the body, and thus occurred in May when a large number of hot money from overseas to enter and 50% of Hong Kong stocks push higher status.
The latest wave of money into Hong Kong stock market pushed up again. In mid-October a large scale of hot money into Hong Kong, Hong Kong stocks hit 22,000-point mark for the first time then; in Hong Kong Monetary Authority injected several times in the market for 23 days, Ze Yi Hong Kong stocks gain 1.71%, to close at 14 On a new high; while the concept of recovery in the week and the Mainland related to state-owned enterprises index rose more than 4%.
Hong Kong property prices become more evident, especially in the high-end residential market price. And 15 at the Hong Kong stock market back on the 22000-point at the same time there has been a news is that a high-rise apartments with a total transaction price of 439 million Hong Kong dollars in Hong Kong and sold, the highest price highest in the world. With Hong Kong’s property market continued to heat up, 23 Hong Kong Monetary Authority has issued a number of tightening mortgage policy to curb hot money into the property market and the potential financial risks.
Francis Lui Ting-ming, said that because Hong Kong’s economic recovery is inferior to the Mainland, together with Hong Kong property and stock markets have limited capacity, it can be concluded outside the influx of hot money is mainly directed at the concept of recovery from the mainland.
He said the reason why hot money via Hong Kong, because there are two major advantages: First, out of funds in the Hong Kong stock market free, hot money speculation in both domestic shares of Hong Kong equities as a platform, through the concept of a profit recovery in the mainland, while carrying to circumvent the Mainland for foreign capital in and out of the threshold limits, capital flow, and security is relatively good; 2 is because the Hong Kong and the Mainland financial intermediation forming underground channels for hot money to flow to Hong Kong as a transit and then the mainland stock and property markets in order to arbitrage.
“Hong Kong Economic Times,” Shi Jing-Quan, director of research reminder that despite the rising price of the property market, but far from the pace of hot money inflows, thus concluded that a considerable portion of the funds in order to turn Hong Kong into the mainland.
By the weak dollar and slow economic recovery, the impact of international idle funds on the one hand to enter the field of oil and other commodities, and 80 U.S. dollars a barrel, oil prices high again fry; the same time, promising new ideas into the recovery in emerging markets. Since the end of last year, Brazilian stock market has risen more than 133%, Russia more than 120%, more than 80% in India, mainland China stock market is up 75% over the same period rose only 14% of U.S. stocks.
Interviewed experts generally agree that a State Council executive meeting stressed that the “managing inflation expectations” argument. In their view, this formulation shows that decision-makers realized that, even though inflation is still high, but as long as inflation is faster, it could lead to increased inflation expectations, and thus motivate the generation of inflation. Therefore, in face of the massive influx of hot money to maintain sufficient vigilance is necessary.
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