Hopewell expects HK property market to remain stable

January 27, 2015 11:16
Interest rate changes will only be mild this year, which will help the property market stay firm, says Thomas Wu of Hopewell Holdings. Photo: HKEJ

Hong Kong's property market will remain stable this year as a potential rise in interest rates will only be mild, said Thomas Jefferson Wu, managing director of Hopewell Holdings Ltd. (00054.HK).

The increase in the US Fed funds rate is likely to be limited as the central bank would not want to jeopardize the nation's economic recovery, the Hong Kong Economic Journal cited Wu as saying Monday.

Wu expects a rise of less than 2 percentage points in the fed funds rate this year, which will help keep Hong Kong property prices stable.

Interest rates in Hong Kong tend to follow those in the US due to the Hong Kong dollar's peg to the greenback.

The Hopewell group, which includes Hopewell Highway Infrastructure Ltd. (00737.HK), had mulled a spin-off plan for its Hong Kong assets in 2013. However, the plan has been put on hold due to unfavorable market conditions, Wu said.

"We currently do not have a pressing need to separately float the assets," Wu said, adding that the group will reassess the situation and its funding need for the plan at a later stage.

The holding company has seen net profit growth of 16.34 percent for the six months ended December, with the earnings coming in at HK$860 million.

The net profit of the infrastructure arm, meanwhile, dropped 16 percent to 261 million yuan.

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