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UBS Expects US Fed to Cut Rates by Another 75 bps This Yr w/ HSI Target 25,300
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The interest rate cut cycle is driving capital flows into emerging markets, which is positive for Hong Kong stock trading, Angus Chan, Associate Director of Research in Asia and Hong Kong strategy and Asia gaming analyst at UBS Investment Bank, said. The broker currently maintains its HSI target at approx. 25,300. UBS expects the US Fed to cut interest rates by another 75 bps this year, with 1-2 additional rate cuts anticipated next year, Chan added. The low interest rate environment is beneficial not only for improving the quality of Hong Kong's commercial real estate (CRE) assets but also for boosting the local retail market. It is estimated that a 1 ppt decrease in interest rates will result in interest expense savings equivalent to approx. 2% of GDP, amounting to tens of billions of dollars. This is expected to generate a wealth effect for Hong Kong residents and benefit the consumer discretionary sector. AAStocks Financial News Website: www.aastocks.com |
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