Hang Seng Bank Ltd. (00011.HK) expects the renminbi’s slide to have a positive impact overall on Hong Kong’s economy and trade.
Re-export of goods from mainland China through Hong Kong is expected to rise due to a weaker renminbi, the bank said, even as it acknowledged that there could be some moderation in the volume of re-export into China.
The overall effect will be positive, the bank said in its research publication, according to the Hong Kong Economic Journal.
While a weaker renminbi could affect mainland visitor spending in Hong Kong, the impact will be limited, Hang Seng Bank said.
The lender expects Hong Kong’s economy to grow by 2 percent this year as it faces headwinds amid China’s slowdown and the recent volatility in financial markets.
The negative effect of the recent slide in equity prices will reflect in the economic data for the third and the fourth quarters, Hang Seng Bank says, pointing out that financial and insurance services represent 16.4 percent of Hong Kong’s gross domestic product.
– Contact us at [email protected]