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Year of the Dragon bodes well for Hong Kong’s ailing stocks as rate cuts, improving Chinese economy bring hope, officials say
- Since its inception, the Hang Seng Index has enjoyed positive returns every time the propitious Year of the Dragon has rolled around
- ‘When others say that we are headed for the bottom, we always rebound and hit new highs,’ says HKEX chair Laura Cha
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Hong Kong’s financial leaders greeted the Year of the Dragon with fanfare, optimistic that the auspicious zodiac sign will breathe some fire – or at least some life – into the city’s beaten down stock market.
“Hong Kong stocks posted positive returns in the past four Years of the Dragon,” said Financial Secretary Paul Chan Mo-po during a ceremony organised by bourse operator Hong Kong Exchanges and Clearing (HKEX) on Wednesday to mark the first trading day of Lunar New Year. The market may be boosted by potential interest rate cuts in Europe and the US, he added.
“In addition, the mainland [Chinese] economy is stable and improving,” he said. “These factors will bring a positive atmosphere to investment sentiment and the asset market.”
The Hang Seng Index jumped 0.8 per cent on Wednesday, reversing an earlier 1.2 per cent fall. Since its inception in 1969, the city’s benchmark gauge has experienced positive returns every time the Year of the Dragon has rolled around. The mythical creature represents a particularly propitious year in Chinese culture.
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Hong Kong stock market falls below 15,000 level, its lowest in 15 months
Hong Kong stock market falls below 15,000 level, its lowest in 15 months
The last Year of the Dragon, in 2012, saw a 15 per cent gain, according to Bloomberg data, a year highlighted by policy easing by global central banks. Similar factors may spur the local market this year too, Chan added.
“Various factors have also made us cautiously optimistic about the Year of the Dragon,” said Chan. “The most important thing is to work with everyone to think of more solutions, innovate and find good development opportunities in the future.”
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