On this Week’s Market Summary:
💡1. Hong Kong’s economy will continue to grow in 2022 but the “breadth, depth and speed” of the expansion will be affected by Omicron, inflation and geopolitical tensions, the financial secretary has predicted. Real gross domestic product grew by 5.4 per cent year on year in the third quarter, after expanding 7.6 per cent in the second quarter. For the first three quarters as a whole, real GDP grew by 7 per cent over a year earlier. Chan expected 2022 to be “a year of economic and social development” as the city had got back on the right track with the “one country, two systems” policy after the Beijing-led overhaul of the electoral system to ensure only “patriots” hold political power and the imposition of the national security law.
💡2. The first climate risks related stress test conducted by HKMA last week on 27 banks in January 2021, the result found that flooding and typhoons represented a major risk for the lenders. More intense climate hazards will cause banks to suffer an annual operational loss of HK$2.2 billion (US$282 million). The finding is significant, because the 27 banks studied had HK$2.9 trillion in property related loans and bad debt might rise 25 times as a result which will hurt bank's profitability. The HKMA will conduct a similar test two years from now, while banks will also improve their systems to prepare for climate-change risks, CEO says.
💡3. The focus of China’s securities regulation next year will be maintaining stability while pursuing reform, the chief said. The CSRC will arrange efforts to ensure the stability of the market, policies and expectations, and on the other, it will seek advancement in reform, opening-up and support for the “high-quality development” of the real economy. The CSRC is working to implement a registration-based initial public offering (IPO) reform across the board. The CSRC will exercise strict oversight of financing, mergers and acquisitions in specific sectors to ensure capital develops in a “sound and orderly manner”, he said.
💡4. Sea’s shares fell 11.4 per cent overnight to a 12-month low of US$197.84 in New York, their biggest single-day percentage decline since March 12, 2020.The sale raised US$3 billion, which Tencent intends to use for funding “other investments and social initiatives. Shares of China’s largest technology company closed 4.3 per cent lower in Hong Kong on Wednesday, after Tencent sold 14.5 million American depository shares (ADS) of Sea at the low end of a price range. The sale pared Tencent’s stake in Sea to 18.7 per cent from 21.3 per cent, reducing its voting power to below 10 per cent, Tencent said. Divestment in the biggest public company in Southeast Asia came less than two weeks after it sold down stakes in China’s e-commerce platform JD.com.
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?” .
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.
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