29/6/2018-1

Motong: If the interest rate of the building exceeds 3%, it will have a great impact on the ability to contribute.

The Hong Kong dollar 1-month HIBOR has risen to 2%, and JPMorgan Private Bank believes that HIBOR keeps pursuing LIBOR (dollar rate). Everyone has expected to raise the prime rate (P) this year, except for end-of-year mortgage interest. If it rises to 3 or 4 percent, it will have a greater impact on the ability to contribute.

In a special interview with Shi Junbin, managing director of Monetary Private Limited and head of Asia’s fixed income, currency and commodities department, he said that the United States has raised interest rates twice this year, and interest rates in Hong Kong have also been following the rise from the original 0.8% to 2%. The Hong Kong-US interest rate spread has narrowed substantially and I believe it will narrow further in the future.

The United States will raise interest rates next time

At present, the prevailing bank’s P is 5.25% (excluding the P of HSBC, Hang Seng (00011) and BOC Hong Kong (02388), which is 5%). Although the 1-Month interim rate related to the Floorbuy has risen to 2%, it is now With P’s capped barrier protection, H’s contribution costs will be locked up. At present, H’s capped interest rate is about 2.1 to 2.15%.

Shi Junbin said that in the past, the building was based on P, but most of the buildings are currently under H, and the importance of P in the role of credit indicators has been relatively reduced. He expected that when the United States raises interest rates next time, Hong Kong interest rates will be greatly increased, but the possibility of adding July plus P cannot be completely eliminated.

In recent years, the property market in Hong Kong has often experienced parents paying for their children’s first-period or even donated properties, or the Mainland’s funds to buy property without the need to build mortgages. Even if HIBOR soars this year, the impact on property prices will be limited. The Central Plains City’s leading index has continued to be created last week. The new high is reported at 184.43 points.

Selecting high-interest stocks

The interest rate hike has not seen any impact on property prices yet, but the stock market seems to have been under pressure. “As the interest rate rises, the cost of capital will increase. Nearly a 3% return on the purchase of short-term bonds or deposits will hinder the mobilization of funds after such a low-risk but high-return investment method appears. Pressure on the stock market."

Shi Junbin pointed out that the rise in interest rates is a global climate. The rise in interest rates must have an impact on asset prices. Therefore, it is believed that there is limited upside for the stock market. Investors are recommended to review high-yield stocks unless there is room for continued rise in dividends, otherwise only 3 to 4 The dividend rate of PCT is limited. He prefers technology and medical stocks that do not have much interest in interest, and he can also look out for bank shares that benefit from the rising cycle of interest rate hikes.