HK chief to deliver annual policy speech

HONG KONG: Hong Kong leader Donald Tsang is set to deliver his annual policy speech on Wednesday, Oct 13 at 0300 GMT, and will likely address the financial hub's overheating property market and growing offshore yuan trade.

In the wake of persistent warnings from officials that Hong Kong risked a property market bubble, analysts said Tsang could announce further measures to clamp down on speculation, which has seen prices rise by almost 50% for the broader property market since the start of last year.

With poverty on the rise in Hong Kong, which has one of Asia's worst wealth gaps, public pressure has been building on Tsang to make housing more affordable.

Market participants say policies might include boosting land supply, policies to help lower income families purchase homes, and moves to tighten residential mortgages.

At the end of trade on Tuesday, the Hang Seng Index was down 0.4%, slipping from a more than two-year peak, with the property subindex down 1.3%.

On the financial front, Tsang will likely seek to deepen ties with China on yuan settlement trade, with the former British colony becoming a major offshore yuan centre. The move could substantially bolster Hong Kong's financial services industry in coming years and help its economy, which grew 6.5% in the second quarter from a year earlier.

In a landmark move in July, China allowed the yuan to be more freely traded and transferred in Hong Kong, paving the way for the sale of yuan-denominated financial products and granting companies greater access to yuan funding.

The move was another step towards China's long-term goal of internationalising the yuan as its economic stature grows.

Hong Kong stocks are set to open higher on Wednesday following further indications that the US Federal Reserve will pump liquidity into the system and with the market closely following Tsang's speech. — Reuters