Hong Kong Financial Secretary Paul Chan Mo-po: The Federal Reserve cuts interest rates by 50 basis points, the overall environment is gradually turning relatively positive

According to Golden Finance, Hong Kong's Financial Secretary Paul Chan Mo-po released a blog post in which he pointed out that the US Federal Reserve cut interest rates by 50 basis points last week, marking the first rate cut in over four years. Coupled with previous rate cuts by several major central banks around the world, this has strengthened financial market expectations of a gradual decline in global interest rates. A relaxed financial environment is also beneficial for asset market sentiment and business operating conditions.

Although under the linked exchange rate system it can be expected that future local interest rates will generally follow those of the U.S., the speed and magnitude of adjustments will depend on local capital flows and market conditions.

In an increasingly favorable macroeconomic environment, there is even more need to further promote Hong Kong's markets. As investors' risk appetite gradually recovers and they seek higher returns, we should strive to broaden and diversify funding sources for Hong Kong's markets.

Following last year’s listing of Asia-Pacific region’s first Exchange Traded Fund (ETF) tracking Saudi Arabian stocks in Hong Kong, The Capital Market Authority recently announced its approval for Saudi Arabia’s first ETF investing in Hong Kong stocks to list on Tadawul (Saudi Stock Exchange), allowing funds from both locally and across Middle East easier direct investment into listed companies in Hong Kong.

Hong Kong will continue to strengthen promotion efforts across traditional and emerging markets as well as foster more cooperation. It is believed that during times when interest rates are falling back down, better leverage can be achieved from different market funds injecting new momentum into our city's capital markets.