Date
29 May 2017
Amid all the uncertainty, investors may look for assets such as property that offer a stable yield. Photo: internet
Amid all the uncertainty, investors may look for assets such as property that offer a stable yield. Photo: internet

Investors chasing yield after Brexit vote

Britain’s vote to leave the European Union has pushed down already low global bond yields to even lower levels.

The economic uncertainty it brought also makes it unlikely for the United States to hike interest rates any time soon.

Given the high possibility that interest rates will stay low for another protracted period, investors are expected to keep chasing assets that are relatively stable and can offer some yield.

Real estate investment trusts are one type of assets that will benefit.

Defensive utility plays will also be in demand.

Elsewhere, interest in investment property in the Asia-Pacific may pick up, property consultancy Colliers said.

Brexit will probably “increase the relative attraction of the 3-6 percent yields on core Asia-Pacific investment property,” it said.

“The vote should remind investors of the potential for shocks in developed as well as emerging countries, and hence mitigate political and economic concerns about the Asia-Pacific region.”

With US interest rates likely to be on hold for some time, so will be Hong Kong’s given the currency peg.

Local property developers may take advantage of the chance to launch new projects.

Meanwhile, foreign developers from all over the world are also gearing up their marketing efforts to tap Hong Kong buyers for homes located anywhere from popular countries like Britain and Japan to more exotic places like Cambodia.

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FL

EJ Insight writer

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