HSBC forecasts slower economic growth this year
HSBC on Monday predicted that Hong Kong's economy will grow at a slower pace this year, but struck an upbeat tone on the performance of the city's stocks. The bank's chief Asia economist, Frederic Neumann, forecast the economy would grow by 2.8 per cent, down from 3.3 per cent last year.  He attributed this to interest rates remaining high and lower than expected economic growth on the mainland. Neumann predicted that the mainland economy would continue to stabilise and grow by 4.9 per cent this year, as stimulus measures from Beijing could help ease the downturn in the property sector. Separately, HSBC's head of Asia Pacific equity strategy, Herald van der Linde, expected the Hang Seng Index to reach 19,300 points by the end of the year, while the Hang Seng China Enterprises Index (HSCEI) will touch 7,160 points. “It’s not really the economy that drives it, but the fact of lower bond yields. Chinese markets are very sensitive to the lower bond yields,” he said.