The situation in Hong Kong has been volatile in recent months
A number of rating agencies and major banks have downgraded their credit ratings and economic growth forecasts. Although Hong Kong’s economy has fallen into a technical recession and there are no signs of resolving the situation, the rating agency Fitch said that there is currently no evidence that social turmoil has affected Hong Kong’s status as an international financial center, but frankly the turmoil will continue to damage Hong Kong as a stable international business center image of. The outside world believes that Hong Kong’s management capacity is weak, which may be detrimental to Hong Kong’s credit rating. Ta Kung Pao reporter Shao Shufen
Fitch downgraded Hong Kong’s rating by one level to “AA” in September this year, the first time in 24 years. The outlook outlook is negative. Fitch said that Hong Kong’s equity and debt capital financing this year is still consistent with the average of the previous three years. At the same time, bank deposits, business registration and work visa data have no evidence to suggest that Hong Kong’s status as a global trading centre has weakened. However, the bank said that the inherent advantages of Hong Kong’s business environment are still threatened, which may weaken Hong Kong’s position and pose potential downside risks to credit ratings.
Economy shrinks 1.5% this year
Fitch continued that even though the short-term outlook for Hong Kong may continue to deteriorate, the medium-term outlook is still positive. The bank stated that Alibaba (09988) had come to Hong Kong for a secondary listing earlier, reflecting that Hong Kong is still the flagship offshore financing center for Chinese companies.
Fitch also pointed out that Hong Kong’s short-term economic outlook continues to deteriorate. It is expected that the economy will contract by 1.5% this year. The tourism, retail, hotel, catering and air transport industries will be hit the hardest. At the same time, property market transactions have fallen sharply. The high dropped back by about 5%. However, the government launched a $ 25 billion bailout measure, equivalent to 0.9% of GDP, so it is expected that economic growth may improve slightly next year.
In fact, S & P also stated earlier that, despite ongoing protests, Hong Kong’s unique advantage of entering the Chinese mainland market will preserve its status as an Asian financial center and its current credit rating. Standard & Poor’s is also the only one of the three rating agencies that has not downgraded Hong Kong’s rating due to the recent situation in Hong Kong. The last downgrade of Hong Kong’s rating to S & P was September 2017. At that time, S & P downgraded Hong Kong’s rating from “AAA” to “AA +”, and the rating outlook was stable.
No loss of confidence
As for another rating agency Moody’s, in September this year, in response to the situation in Hong Kong, the Hong Kong rating outlook was adjusted to negative and the rating was “Aa2”.
Lin Yingji, managing director and head of research department of China Everbright International Investment, agreed with the Fitch report, saying that the recent events were only short-term impacts, and Hong Kong’s status as an international financial center has not been shaken. , And Alibaba (09988) can be reflected in the successful listing in Hong Kong. He continued that foreign investors still want to enter the mainland market through Hong Kong, and China also wants to maintain Hong Kong’s status as an international financial center. He also pointed out that the Hong Kong linked exchange rate is very stable and the foreign exchange reserves are strong, which is the confidence for investors.