Hong Kong

HenryTo · Posted: Tue Jan 22, 2008 10:41 pm Post subject: Hong Kong

The Hong Kong Monetary Authority cuts its base rate by 75 basis points as it follows the Fed's move:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPObpGBoksic&refer=home

rffrydr · Posted: Fri Jun 03, 2011 5:41 am Post subject:

Macro Team looks for pulling of the peg as depositors stampede to Yuan accounts:

.....HK Commercial Bank: you only make loans on HK property in HKD - unfortunately, your deposits are running away. So what do you do? Make loans in CNY, basically accepting that HK is going to creep towards a CNY peg? Beg and plead with the HKMA to arrange some currency swaps? Or just keep on ratcheting up mortgage rates as your funding runs away to cause rates to level peg with yuan rates? In the meantime, your funding still keeps walking out the door.

HKMA: You are worried about a bubble as real activity is in Yuan but you have a USD monetary policy due to the peg. Do you repeg? Or do you just pester your banks about their loan to value ratios and force them into stress tests without doing anything at all to solve the root of the problem? To date, the latter appears to be the HKMA's attitude.

The sensible answer is to repeg and basically follow CNY monetary policy for better or for worse, because, lets face it, the HKD peg is an anachronism from when HK was a light manufacturing hub that exported most of its products to the US and Europe. It is of course now a financial services hub that is leveraged beta on China and Chinese capital markets activity.

So what is the trade? There is of course the old HKDUSD cross which is one of the more asymmetric trades out there, sadly you pay for it on risk reversals. Another trade though might be Hong Kong banks as distinct from mainland Chinese banks. If HK banks were to become organizations that got deposits, made loans and generally operated in Yuan they would no doubt be as hitched to monetary policy on the mainland as Chinese State Owned Banks and be the recipients of those sweet, sweet 3% Net Interest Margins that Chinese bank analysts know and love. They would also, however, not be natural lenders into all the dumb infrastructure and business lending that Chinese bank analysts know and hate.

Now, TMM may be crazy but if you are making 3% NIMs, not lending to fundamentally uneconomic policy projects and are reasonably well run, you can expect to get a 2-2.5x Price to Book multiple much like higher quality Indonesian banks. As a thought exercise, TMM have seen what the valuation uplift could be for a few HK banks.

In the interim, TMM expect some choppiness in these names as the HKMA girds them for the big inevitable change, but the asset risk is manageable here: HK property may be a bubble but these guys lend to 60% LTV and do not have the type of stuff on balance sheet that Chinese banks do. Going long HK banks and short Chinese ones might not be a bad way to play the HK peg, not to mention a China credit blowup, if you get bored of waiting for what feels like forever for something to happen in the FX market

http://macro-man.blogspot.com/2011/05/hkd-peg-unbreakable.html
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Sun Sep 19, 2010 9:51 am Post subject:

Not exactly giving it away; but the idea of making the populace pro-active, and keeping them so (as long as the money lasts) is a bit radical. (see the "invisible man" for the opposite sentiment) HK IS chinese democracy--for better or worse.

Looks like Li is ready to shake Bill and Warren's hand as an "equal." Slap my face.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Sun Sep 19, 2010 9:36 am Post subject:

Li Ka-shing to give back HK$300 million with his philanthropic campaign called "Love HK Your Way."

http://www.cnngo.com/hong-kong/life/li-ka-shing-wants-give-his-millions-you-168584

rffrydr · Posted: Mon Jul 19, 2010 3:44 pm Post subject:

This is part of the yuan "reval without reval" policy first applied in Beijing I do believe.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Sun Jul 18, 2010 9:22 pm Post subject:

Hong Kong tackles the income distribution issue by instituting a minimum wage law:

http://www.economist.com/node/16591088

HenryTo · Posted: Sun Feb 21, 2010 6:31 pm Post subject:

Hong Kong real estate prices (i.e. bubble) show no signs of letting up:

http://www.bloomberg.com/apps/news?pid=20601068&sid=a.pUAk25uXdA

rffrydr · Posted: Fri Jan 22, 2010 9:05 pm Post subject:

11 of 20 IPOs this year under issue price. 100 percent first day gains are a memory.
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Wed Jan 20, 2010 10:33 am Post subject:

FXI down 4.44% today. Twisted Evil

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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Sat Jan 02, 2010 2:22 pm Post subject:

Hong Kong raised more money in IPOs this year than all US exchanges. Some see this as a sign of the "Chinese Century"--I'd say more a sign of how great this "Great Recession."
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Wed Dec 02, 2009 7:58 am Post subject:

November Hong Kong Home ales fell 0.9% in units and have dropped four of the past five months. The value, however, rose 5% m/m. The level of units peaked in September.
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Wed Oct 28, 2009 8:53 am Post subject:

Property prices by fiat....yet here was an early indicator:

http://www.thestreet.com/p/_search/rmoney/etf/10607124.html
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Mon Oct 26, 2009 10:13 pm Post subject:

Hong Kong Monetary Authority tries to clamp down on residential property speculation by raising downpayment requirements for homes of over HK$20 million:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aY5x7I17EoPA

HenryTo · Posted: Wed Oct 14, 2009 11:45 am Post subject:

Hong Kong real estate prices now getting white hot:

http://www.nytimes.com/2009/10/15/realestate/15property.html

rffrydr · Posted: Fri Sep 18, 2009 4:20 pm Post subject:

Does 40m jobs lost count as a "bust"? With China it's a yin-yang thing:

http://www.ft.com/cms/s/0/ee77d82e-9e69-11de-b0aa-00144feabdc0.html

From Macroman:

HenryTo · Posted: Wed Sep 16, 2009 9:22 pm Post subject:

Prices of Hong Kong real estate soar to unbelievable heights. And to think that many folks were calling for a bust in China just six months ago:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDwrVQfd8g0w