Policy Address 2024 | Paul Chan: Europe, US account for over 80% of recent net stock market capitalization
The Chief Executive, John Lee, delivered his third Policy Address on Wednesday (Oct. 16). At a press conference today (Oct. 17), the Financial Secretary, Paul Chan, said Hong Kong's economy recorded modest growth in the first half of the year, with the Gross Domestic Product (GDP) growing by 3% year-on-year in real terms.
Chan said that according to the latest data, Hong Kong's economy continued to expand, but the performance of different segments varied. The value of exports of goods grew by 9.6% in July and August combined under sustained external demand; the inbound tourism sector also continued to recover steadily, with average daily visitor arrivals rising to about 124,300 in the third quarter, or about 70% of the same period of 2018; during the National Day "Golden Week", average daily mainland visitor arrivals rose to about 173,800, an increase of more than 27% compared with the same period last year, and returned to about 80% of the same period of 2018; and the average occupancy rate of hotel rooms in August was as high as 90%, which was higher than the same period last year.
Chan added that the half-percent interest rate cut in the US, coupled with the successive introduction of a series of policies and measures by the central government in support of the economy, have significantly boosted the market sentiment, and the local stock market has seen a significant improvement since the second half of September. According to relevant analyses, the source of net buying in the stock market recently came mainly from investors in the US and Europe, which accounted for about 85% of the value of net buying, while more than 90% of the net buyers came from long-term fund managers and investment banks. These figures show that despite geopolitical challenges, US and European investors continue to be interested in the Mainland and Hong Kong markets, and that they have been waiting for the right opportunity to enter the market and are now taking action.
Chan believes that Hong Kong's overall economy should continue to grow in the rest of the year. Although trade frictions and uncertainties in the global economic outlook will continue to have a negative impact, the US has entered a cycle of interest rate cuts, and Hong Kong has started to reduce interest rates at the same time, which will help lower business costs. The tight financial situation should ease gradually, and with the introduction of the country's stimulus measures, the mainland economy is expected to grow steadily. All these will help boost market confidence and support various segments of the Hong Kong economy, especially fixed asset investment and private consumption.
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