Report
TYC Strategy Hong Kong/China
The attached analysis reports the likely reversal in Hong Kong's 'hot'markets as a potential trigger for higher volatility in mainland China and
broader Asia.
In 1997, a sell-off in the Thai Baht triggered a financial crisis in Asia,
exposing enormous fundamental problems. In 2015, the peak in Hong Kong's
housing market coincided with an around 50% peak-to-trough sell-off in
China's stock market.
TYC has frequently reported the persisting underlying weakness in China's
credit cycle, following exaggerations of historical scale in credit and
housing markets. As shown in this report, Hong Kong's housing market has
consistently lagged its mainland peer and is about to reach a new peak,
following a period of unsustainably fast price growth.
Similar to 2015, upcoming financial tightening has therefore the potential
to cause the housing market to roll over, creating not just economic
downside risk in Hong Kong, but negative financial spillover to mainland
China and the rest of Asia.
Provider
ThirdYear Capital
ThirdYear Capital is a provider of global macro strategy and portfolios, focusing on systematic countercyclical investing.
For additional information and contact, please refer to our website: http://third-year.com/
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