The Hang Seng's future is looking rather gloomy
- Asian Market
- 5 months ago
Hong Kong’s index, the Hang Seng, is closing the year on a low and the outlook ahead does not seem very pleasant.
Amid the trade feud between Washington and Beijing, added with a decreasing IPO scene which is set to add pressure, as BOCOM head of research, Hao Ho ng put it, “I would say it’s between a rock and a hard place.”
The IMF stated that, “Hong Kong ... is vulnerable to further escalating U.S.-China trade tensions, possible disorderly tightening of global financial conditions, slower-than-expected growth in Mainland China, and a sharp housing market correction,” as it attended a consultation with local Hong Kong authorities.
Its banks are forecasted to underperform in 2019 in a report by Citi, while Ronad Wan of Partners Financial Holdings said, “I think the market will be even more challenging,” pointing that a breakthrough in the U.S.- China trade dispute is very unlikely and predicted a slowdown in the Chinese economy is imminent,
Other analysts have a bearish outlook for the Hang Seng, like Mark Jolley of CCB International who expects a, “downward earnings revisions, which will be the key driver of the market over the next six to nine months.”
Nevertheless, the IPO forecast for the year ahead is positive as new listing rules came into place regardless of the criticism as new listings like Xiaomi and China Tower were among Hong Kong’s largest ever IPO’s.
Jackson Wong of Huarong International Securities is restraining his optimism, as while stating that the Hang Seng could pull back to 30,000, he stressed the need for China to seek European and other buyers for its products, “If China cannot figure a way out of this, we are still in trouble.”
And as he put it, Hong Kong depends on it.
Source: Smart Trend Team