Many financial experts remain upbeat about the prospects of the equity markets in Hong Kong and China despite the current turbulence stemming from Greece’s economic woes.
Given the improving economies in Europe, the United States, Japan and China, markets in Hong Kong and mainland China are likely to turn better in the coming months, said Chan Yue-yan, Hong Kong institutional investment strategy director at Fidelity Worldwide Investment.
The Greek economy accounts for only about 1.5 percent of the total economic output in Europe, Chan noted, adding that the impact of Greece’s rejection of austerity measures will be limited.
Meanwhile, China’s recent efforts to contain the stock market slump shows that authorities are determined to maintain market liquidity, Chan said, according to the Hong Kong Economic Journal.
Chan says Beijing could implement more interest rate cuts and relaxation of bank reserve requirement ratios if needed. Meanwhile, the full impact of previous monetary easing measures will only be reflected in the second half of this year.
Mark Haefele, global chief investment director at UBS AG, also holds a positive view about the markets. Corporate profit growth is expected to drive equity in Europe amid continuing quantitative easing, he said.
Citibank global personal banking investment strategy and research head Catherine Cheung said the latest slump in China’s A-share markets is a reasonable adjustment that could lower the risk of a bubble.
Citi expects the CSI 300 index to reach 4,300 points next year, while the Hang Seng Index is seen finishing at 32,000 points by the end of this year.
Translation by Vey Wong
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