Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Technical Analysis

Henderson Land Development / Technical Analysis

<ul><li>Here comes HIBOR. Its rise is likely to accelerate and brake illusions of stability brought by the Fixed Exchange Rate.</li><li>While countries have been able to adjust to the economic environment through changes in monetary policy and depreciating currency, Hong Kong fixed exchange rate means the cost of adjustment has to be absorbed elsewhere.</li><li>Asset prices and HIBOR are the safety valve to adjust the imbalances due to fixed exchange rates with no capital control.</li></ul>

Here comes HIBOR. Its rise is likely to accelerate and brake illusions of stability brought by the Fixed Exchange Rate.While countries have been able to adjust to the economic environment through changes in monetary policy and depreciating currency, Hong Kong fixed exchange rate means the cost of adjustment has to be absorbed elsewhere.Asset prices and HIBOR are the safety valve to adjust the imbalances due to fixed exchange rates with no capital control.

<ul><li>A better way to think of the Hong Kong Market in the current cycle is that it has both US &amp; China's economic headwinds and requires sharply lower rates and currency to correct macro imbalances.</li><li>HKMA should be cutting interest rates, but it cannot do so due to the currency peg.</li><li>Over the last 12-18 months, Hong Kong developers have enjoyed stability in expectations of reopening borders, investment demand, strong balance sheet compared to mainland developers, and low funding costs (HIBOR). These tailwinds are now headwinds.</li></ul>

A better way to think of the Hong Kong Market in the current cycle is that it has both US &amp; China's economic headwinds and requires sharply lower rates and currency to correct macro imbalances.HKMA should be cutting interest rates, but it cannot do so due to the currency peg.Over the last 12-18 months, Hong Kong developers have enjoyed stability in expectations of reopening borders, investment demand, strong balance sheet compared to mainland developers, and low funding costs (HIBOR). These tailwinds are now headwinds.

Hang Seng Index Constituents 16th June 2022

Hong Kong

Henderson Land Development Company Limited, through its subsidiaries, develops, invests in, and manages properties. The Company also provides project management, construction, and finance services. In addition, Henderson Land Development operates department stores, hotels, and infrastructure business.

Henderson Land Development (12 HK)

SKHP, MTR and Henderson Land

Here comes HIBOR. Its rise is likely to accelerate and brake illusions of stability brought by the Fixed Exchange Rate. Asset prices and HIBOR are...

Untying The Gordian Knot

Hang Seng Index Constituents 16th June 2022

A better way to think of the Hong Kong Market in the current cycle is that it has both US & China's economic headwinds and requires sharply...

Untying The Gordian Knot