Fragile
Article Abstract:
The Hong Kong stock market faces problems due to the link between the Hong Kong and US dollar, according to Edmond Warner from NatWest Markets. Maintaining the link means interest rates have to be kept high, while an end to the link would lead to a loss of confidence in the stock market. Mainland China accounts for an increasing percentage of the earnings of firms quoted on the Hang Seng index. China is suffering from weak domestic demand and a drop in demand for exports. A devaluation in China would lead to pressure on the Hong Kong currency.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
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Sighs of relief
Article Abstract:
Hong Kong stock prices dropped by 20% in Aug 1997, measured through the Hang Seng index, but they have since recovered. Stock prices are still volatile, but Goldman Sachs sees the market in positive terms so long as interest rate rises are restrained and currency instability eases in southeast Asia. Merrill Lynch is more optimistic and sees Hong Kong as likely to benefit from a strong real estate market and its long-term role as China's service center. Hong Kong should also benefit from commitment to economic reform in mainland China.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1997
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