Everything seems to be going Hong Kong’s way these days. The country’s growth spurt seems to have convinced the government to begin a stimulus pullback and cut certain measures. Will the exchange traded fund (ETF) be far behind in reflecting the improvement?
Exports and retail spending have rebounded, sparking a wave of optimism about the economy. As a result, the government limited stimulus in its most recent budget and is turning an eye toward cooling potential asset bubbles. The BBC reports that Hong Kong’s economy will grow between 4% and 5% this year. Financial Secretary John Tsang said that in order to tamp down a potential property bubble, taxes on the most expensive homes would be raised. Home prices have soared 29%, so it’s no wonder they’re a little nervous. [Hong Kong Looking to the Future.]
It’s not all sunshine and roses; like many nations, Hong Kong is hyper-alert to inflation risks and the recovery is far from a firm one. Consumer prices rose 1% in January from a year earlier, but it represents a pullback from December’s 1.3% spike, reports Bloomberg. [Hong Kong At Risk of an Asset Bubble?]
[For more stores about Hong Kong, visit our Hong Kong category.]
- iShares MSCI Hong Kong (NYSEArca: EWH)
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.