MARKETS-HONG KONG Hong Kong markets drop to lowest level this year

Record ID: 143161

  • Title: MARKETS-HONG KONG Hong Kong markets drop to lowest level this year
  • Date: 20th August 2015
  • Summary: (SOUNDBITE) (English) GEO CHIEF EXECUTIVE, FRANCIS LUN, SAYING: "In the past two months the Chinese government show to the world their incompetence dealing with the stock market. And then the exchange market and also the economy. So nothing is working right for China. And if China is not working right, then Hong Kong will suffer. And this is exactly what happened. And the
  • Embargoed: 4th September 2015 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: General
  • Reuters ID: LVA16N18GJW1E7RB763ACH1KE3VY
  • Aspect Ratio: 16:9
  • Story Text: Concerns about slowing growth in China sent Asian shares to two-year lows and pressured oil prices on Thursday (August 30) while minutes from the U.S. Federal Reserve's July meeting dented expectations for a rate hike in mid-September.
    MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.1 percent, with Hong Kong's Hang Seng Index falling as much as 2.0 percent at one point to an 8-month low.
    "Well the Hong Kong stock market fell for the fifth consecutive day and today is really the worst. Because the Hang Seng lost at one time more than 400 points and then fell to the lowest level of the year. Investors are really selling off and they're packing their bags and leaving the market," said CEO of brokerage firm GEO.
    Fears that growth in China, which carried the global economy following the 2008 international financial crisis, is slowing over the long term are affecting risk assets around the world.
    China's combined exports and imports for the first seven months of 2015 fell 7.2 percent from the same period last year, prompting Beijing to devalue the yuan last week.
    Lun said Beijing's intervention in its market has also backfired.
    "In the past two months the Chinese government show to the world their incompetence dealing with the stock market. And then the exchange market and also the economy. So nothing is working right for China. And if China is not working right, then Hong Kong will suffer. And this is exactly what happened. And the stock markets just fell across the board," said Lun.
    While a cheaper yuan should help boost China's exports, a deadly blast last week near Tianjin port, an important trade hub, looks set to disrupt any recovery in trade in the near term.
    The commodities sector was among the hardest-hit by fear of slowdown in Chinese demand.
    Minutes from last month's Fed monetary policy meeting showed officials in broad agreement that the U.S. economy was nearing the point where interest rates should move higher.
    But they also noted lagging inflation and a weak global economy posed too big a risk to commit to "lift off", leading some investors to question the likelihood of a rate hike in September.
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