Weekly Market Summary

💡1. Hong Kong is staking a claim as Asia’s green finance hub, as the number and value of bonds related to environment, social and governance (ESG) quadrupled over the past year. As many as 90 ESG bonds were issued this year, raising a combined HK$270 billion, four times what was sold last year, according to chief executive of HKEX. The HKEX itself is investing for the future, paying 210 million yuan (US$32.45 million) this year for 7 per cent of a newly created Guangzhou Futures Exchange to develop products that can be traded onshore and offshore in Hong Kong by international investors.

💡2. Foreign investment in emerging market stocks and bonds outside China has come to an abrupt halt over fears that many economies will not recover from the pandemic next year, their prospects worsened by the Omicron coronavirus variant and expectations of higher US interest rates. In late November, non-resident flows to EM assets excluding China turned negative for the first time since the coronavirus-induced market ructions of March 2020, according to data from the Institute of International Finance. A strengthening US dollar could destabilise the economies of countries such as Turkey, Brazil, South Africa and India, which tend to borrow in their own currencies but depend largely on foreigners for inflows. As the greenback strengthens, returns for international holders of EM stocks and bonds are eroded.

💡3. Global institutional funds have stepped up their purchases of industrial property in Hong Kong this year by 54 per cent, as Covid-19 continues to support bullish demand for data-centre and cold-storage facilities. As a result, growing e-commerce has fuelled aggressive buying by global real-estate funds, industry consultants said. The funds invested HK$11.2 billion or just over one-fifth of the total in all of 2020. Among recent notable transactions, US private equity giant Blackstone acquired an industrial building named Elegance Printing Centre in Shau Kei Wan on Hong Kong Island for HK$500 million. The demand for logistics assets appears to be sustainable as the local and global supply chains continue to recover. That makes the industrial property sector more appealing, given the downward pressure in rents for office and retail properties in the city.

💡4. The People’s Bank of China this week announced a 50-basis point cut reserve requirement ratio effective from December 15, the second this year after a July 9 move. The decision will free up 1.2 trillion yuan (US$188 billion) of capital for the economy, the most since a full percentage point reduction in October 2018 unleashed the same amount of cash. 

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One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?” 

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Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions.