5/10/2018-2

Tao Dong: Hong Kong Bank is too loose. The HKMA is tightening. “Rarely, there is a rate hike of 1/8%."

Hong Kong officially entered the interest rate hike cycle. Tao Dong, vice chairman of Credit Suisse’s Asia Pacific Private Bank Greater China Region, Hong Kong Bank has been reluctant to raise interest rates. It is quite complacency, forcing the HKMA to pressure banks to gradually increase their banks. The interest rate will be released to avoid a major impact on the property market and the local economy once interest rates soar.

“This rate hike is not so much that the Fed’s interest rate hike has caused Hong Kong’s interest rate to rise. It’s better to say that Hong Kong has a lot of money flowing away in the near future.” Tao Dong said in an exclusive interview with the newspaper that the Sino-US trade war is against Hong Kong’s capital and economy. The outlook has a negative impact. The sharp appreciation of the US dollar has also impacted emerging markets, resulting in the withdrawal of funds. How many times the Hong Kong will increase in the future will depend on the Fed’s rate hike.

If there is no worries last week, it will raise interest rates sharply.

After the United States raised interest rates eight times, Hong Kong banks generally only raised interest rates by 0.125% last week, which was regarded by the market as “plus half interest rate." Tao Dong said that large banks do not like to raise interest rates, but the HKMA is worried that if Hong Kong silver suddenly raises interest rates in a big breath, interest rates will be greatly affected, and the property market will have a big impact. The property market is a big deal for banks and the Hong Kong economy. Risks, so pressure, I hope that banks can gradually raise interest rates. However, whether or not to raise interest rates is always a commercial decision. Therefore, “there is a rare rate hike of one point, half done and half done."

“The HKMA has repeatedly reiterated that it should pay attention to risks and risks carefully this year. It reflects that the authorities are very nervous about the rise in interest rates. This is a systemic risk. For the HKMA, the risk can be released by adding less."

Mr. Leung Siu-kei, an adviser to the Asia-Pacific region of HSBC Bank, said on Thursday that the interest rate hike has taken into account a number of factors, including its own deposit structure, depositors’ feelings, horizontal competition and interest rate. It is not a “reluctant move". Emphasis is on bank business decisions. As the US interest rate hike in December is high, he does not rule out that Hong Kong will raise interest rates again before the end of the year.

At present, only Overseas Chinese Yongheng and Chiyou Bank follow the US interest rate and raise the best interest rate (P) by 0.25%. Tao Dong pointed out that the recent increase in interest rates has reflected the transformation of the supply and demand of funds. Banks have pressure to raise interest rates. The pressure on small banks is particularly high. Because of the financing through the interbank interest rate market, small banks must go through interest rate hikes. Attracting deposits.

Fear of impact on the property market and then the economy

The Hong Kong dollar is pegged to the US dollar, but the US dollar interest rate is much higher than the Hong Kong dollar interest rate. Because Hong Kong banks are too lax, they do not feel that this is a problem. They would rather gamble on a shop and bet that the amount of capital outflows and Hong Kong dollar deposits transferred is not large. Once the funds suddenly flow away, the banks will need to raise interest rates substantially. “If the trade war or the emerging market crisis worsens, it is not excluded that Hong Kong’s rate hike is higher than that of the United States."

Tao Dong said that the current market is full of uncertainties. The stock market has responded to some factors a few months ago. The stock market and the bond market have entered a bear market, but the property market has only just begun to react. Some properties are now priced, and the volume of transactions has plummeted. Although some transaction prices have fallen by 5% to 10%, the price is still relatively hard in Tao Dong’s eyes. The overall property market is in a stalemate. “I am not sure whether the property market will follow the trend of stocks, but the risk is significantly higher than before."