Date
27 May 2018

Eric Lui

Hong Kong Economic Journal chief economist and strategist
  • A strong dollar plus rising US rates would put a heavy burden on emerging economies and threaten their financial safety. Photo: Bloomberg

    A stronger dollar could trigger the next financial crisis

    - May 18, 2018 1:49pm
    Let’s revisit how the Hong Kong market collapsed in the second quarter of 2015. The Hang Seng Index slumped as much as 36 percent to 18,278 points on Feb. 12, 2016, from a high of 28,588...
  • Investors are supposed to do well by owning stocks from the beginning November to the end of April, then parking the money in money market funds, and repeating the pattern in the following year. Photo: Reuters

    Does ‘sell in May and go away’ work?

    - May 11, 2018 10:41am
    At around this time of the year, a lot of space in financial news pages is typically devoted to the seasonal pattern of sluggish performance in May and June and a rebound that follows in July....
  • Stock market investors will watch closely the pace and scale of US bond yield rebound. Photo: Reuters

    Will rising US Treasury yield hurt the equity market?

    - Apr 27, 2018 9:44am
    The 10-year US treasury yield hit the key psychological level of 3 percent on Tuesday for the first time in four years. Billionaire bond investor Jeffrey Gundlach once said that if the 10-year yield does crack...
  • Hong Kong has seen enhanced market volatility this year. Photo: Reuters

    Hong Kong equities: earnings gauges point to more upside

    - Apr 20, 2018 3:09pm
    Global stock markets have been extremely volatile this year. The looming trade war between the United States and China, the Syria geopolitical crisis and other events all have contributed to enhanced market volatility. A measure of...
  • A strategy that combines market momentum and fundamental value in stock selection may work better in a volatile market. Photo: Reuters

    A strategy that combines momentum and value investing

    - Apr 13, 2018 11:42am
    My two momentum-based mock portfolios have underperformed the Tracker Fund of Hong Kong (02800.HK) in the first quarter due to an extremely volatile market. Amid the market turbulence, many stocks in the two momentum-investing portfolios triggered...
  • Hong Kong stocks are expected to stabilize following the recent steep market correction, say some observers. Photo: Reuters

    Where is the Hong Kong market heading?

    - Feb 20, 2018 1:27pm
    The Hang Seng Index fell back sharply after hitting a peak of 33,484 points on January 29. In this pullback, the benchmark slumped up to 4,355 points or 13 percent in two weeks. During the setback,...
  • Rate hikes are unlikely to pose too much threat to the stock market, given that the current rates remain extremely low. Photo: Reuters

    Is the equity bull market over?

    - Feb 9, 2018 2:01pm
    The US stock market has suffered a sudden crash over the last few days. The biggest question now is whether the bull market cycle has already come to an end. The Dow Jones Industrial Average has...
  • The Federal Reserve may turn more hawkish and speed up the rate hikes to prevent economic overheating. Photo: Reuters

    Fed may hike rates four times this year on rising inflation

    - Feb 2, 2018 1:14pm
    Based on Fed fund futures, the market consensus is that the Federal Reserve will hike rates three times this year by 0.25 percent each time. But I personally believe that the market may have underestimated the...
  • The Hang Seng Index has rallied more than 3,000 points or 10.2 percent in the first 17 days of this year.  Photo: Reuters

    Are we seeing the last leg of the stock market rally?

    - Jan 26, 2018 11:11am
    The Hang Seng Index has been performing extremely well since the start of the year. The huge gains have surprised many investors. A number of indicators suggest that the Hong Kong market is already in the...
  • Momentum investing may continue to work well in Hong Kong this year, given that the market rally is still led by a small group of stocks. Photo: Bloomberg

    Strong counters to continue outperforming this year

    - Jan 12, 2018 12:12pm
    I had recommended two momentum investing portfolios in the middle of last year based on changing market circumstances. Both portfolios have outperformed the market by wide margin, generating returns of 118.4 percent and 75.9 percent compared...
  • The US equity market is expected to go up further next year thanks to rising corporate earnings and tax reform. Photo: Reuters

    Reality check for my 2017 forecasts

    - Dec 29, 2017 4:28pm
    It’s time to check how my 10 forecasts for this year worked out. 1. Global economic growth to pick up. Correct. The world’s major economies have maintained their growth momentum over the last 12 months, and...
  • US markets may climb to new highs next year, providing momentum to other bourses, including Hong Kong. Photo: Reuters

    2018 outlook: Equities to hit new high, property under pressure

    - Dec 22, 2017 12:31pm
    After a strong rally this year, the Hang Seng Index is likely to sustain the strength and hit a record level in 2018. Supporting the bullish outlook is the recovery momentum of the global economy and...
  • The dollar index saw a sharp pullback this year. But as the US economy is expected to maintain its strength in 2018, and interest rates will go up further, the US dollar should move higher next year. Photo: Reuters

    US dollar may stage a comeback next year

    - Dec 15, 2017 9:06am
    This is the second part of my 2018 forecast series. Basically, I see a stronger greenback, rising global inflation and the bull market of US Treasuries coming to an end. Over last two years or so, the...
  • Global market liquidity remains abundant as Europe and Japan are still pumping money into the market while US tightening pace remains moderate. Photo: Reuters

    Global economic outlook remains positive

    - Dec 8, 2017 12:09pm
    At this time of the year, I’ll give my 10 predictions for 2018, covering the macro economy, interest rates, currencies, stock markets and housing markets over next three weeks. For next year, the global economic outlook...
  • Data shows that the housing price rally will slow down in the following months or even head south. Photo: HKEJ

    Hong Kong housing market shows signs of cooling off

    - Nov 10, 2017 1:10pm
    Hong Kong’s private market housing price index rose to 340 points in September, according to data from the Rating and Valuation Department. The housing price index has been on the rise for 18 straight months, and...
  • Most Hong Kong banks have held back on rate increases although the Fed started tightening since late 2015. Photo: China Daily

    HK banks may continue to hold back on rate hikes

    - Nov 3, 2017 11:01am
    The Hong Kong dollar interbank rate, or Hibor, has spiked considerably in recent months. Will that prompt local banks to raise interest rates? If that happens, how will property prices be affected? It’s widely expected that...
  • A weakening of the exchange rate against the greenback or a rise in interbank rates are some of the preconditions needed to trigger a rate hike in Hong Kong. Photo: malaymailonlinel.com

    What is the chance of a rate hike in Hong Kong?

    - Sep 29, 2017 12:29pm
    US Federal Reserve chairwoman Janet Yellen has heightened expectations of another rate hike in December in her latest comments. The Fed “should also be wary of moving too gradually”, Yellen said in a speech delivered to...
  • The US Federal Reserve is widely expected to adopt a gradual approach in its balance sheet reduction move. Photo: Reuters

    Why Fed’s balance sheet unwind won’t hurt the US stock market

    - Sep 22, 2017 9:25am
    With the US Federal Reserve confirming that it will begin unwinding its US$4.5 trillion balance sheet, investors are concerned about the potential implications for the stock market. How will the central bank exactly proceed with the...
  • Improving corporate earnings could help the Hong Kong stock market post further gains. Photo: Reuters

    Why HK equities appear poised for further gains

    - Sep 14, 2017 5:05pm
    More than 1,300 out of a total of about 2,000 Hong Kong-listed firms had published their interim results as of September 12. According to an analysis, the companies saw their combined sales revenue rise 9.3 percent...
  • Based on the monthly volatility pattern and overbought conditions of Hong Kong equities, another round of rally may be brewing. Photo: Reuters

    HK equities: The biggest surge is yet to come

    - Sep 7, 2017 5:15pm
    The Hang Seng Index rallied 646 points or 2.37 percent in August, marking the eighth straight month-on-month gain. The index has soared nearly 6,000 points or 27 percent over the period, a long winning streak that...

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