The US Fed kept interest rates unchanged ... how will it affect Hong Kong?
What are the implications of the US Fed’s latest (in)action on Hong Kong?
The US Federal Open Market Committee decided to keep interest rates unchanged in September, while signalling a rise before the end of this year. Here is a quick look on how the decision would affect Hong Kong.
Property
The availability of cheap money will spur Hong Kong’s developers to speed up their efforts to market new projects, taking advantage of a strong sales momentum, said Knight Frank’s head of valuation and consultancy Thomas Lam.
“Buying interest for new flats will continue to be strong over the next few months as interest rates remain low,” he said. “Home buyers will not be affected unless interest rates rise by more than two percentage points. That may not happen this year. The property market outlook is still determined by government policy and economic performance.”
Stock market
Mainland Chinese banks and Hong Kong’s property stocks are likely to rebound from last week’s slump.
Low interest rates in the US help Hong Kong’s high-dividend stocks the most, said Sinopac Securities’ research head Ivan Li Sing-yeung.
“Hong Kong’s stock market has priced in the possibility of a rate rise in December, therefore the market’s sentiment is more likely to be driven by China’s economy in the remaining months,” Li said.
